Crude Oil (WTI)

West Texas Intermediate (WTI) is a light, sweet crude oil grade that serves as the primary benchmark for oil pricing in the United States, traded as a futures contract on the New York Mercantile Exchange (NYMEX). "Light" refers to its low density, and "sweet" refers to its low sulfur content — both properties make WTI relatively cheap and easy to refine into gasoline and other high-value fuels compared with heavier, higher-sulfur crude grades produced elsewhere.

WTI prices are quoted for physical delivery at Cushing, Oklahoma, a major pipeline and storage hub — inventory levels at Cushing, reported weekly by the U.S. Energy Information Administration, are one of the most closely watched short-term indicators for the U.S. oil market and can move prices sharply on release.

As a landlocked benchmark historically somewhat insulated from international shipping dynamics, WTI's price can diverge from the international Brent benchmark based on U.S. pipeline capacity, domestic shale production levels, and refinery demand, even when global oil supply and demand conditions are similar. That WTI-Brent spread is itself a widely tracked indicator of regional supply imbalances.

WTI is also known for one of the most extraordinary events in commodity-market history: on April 20, 2020, the front-month WTI futures contract briefly traded at a negative price — sellers effectively paying buyers to take oil off their hands — as pandemic-driven demand collapse left traders holding futures contracts with nowhere left to store the physical crude ahead of contract expiry. The episode remains a widely cited case study in how futures contracts tied to physical delivery and finite storage capacity can behave in extreme conditions.

The rise of U.S. shale drilling over the past decade and a half turned the United States from a major oil importer into one of the world's largest producers, giving domestic production trends much greater influence over WTI pricing than in prior decades, alongside the more traditional drivers of OPEC+ production-quota decisions and the U.S. Strategic Petroleum Reserve, which the government can release from or replenish to influence domestic supply.