The term 'West Texas Intermediate', sometimes found in news, refers to a grade of
Detailed Explanation:
Answer: Option 1 — Crude oil
West Texas Intermediate (WTI) is a grade of crude oil that serves as a major benchmark for oil pricing, particularly in North America. It is classified as light, sweet crude oil due to its low density and low sulfur content, making it highly desirable for refining into gasoline and other petroleum products.
📝 Short Notes: Global Crude Oil Benchmarks
| Benchmark | Origin | Characteristics | Geographic Coverage |
|---|---|---|---|
| West Texas Intermediate (WTI) | United States (Cushing, Oklahoma) | Light, sweet crude (low sulfur, low density) | North America pricing benchmark |
| Brent Crude | North Sea (between UK and Norway) | Light, sweet crude | Global benchmark (Europe, Asia, Africa) |
| Dubai/Oman Crude | Middle East | Medium sour crude | Asia-Pacific pricing benchmark |
| OPEC Basket | Weighted average of OPEC nations | Mix of light and heavy crudes | OPEC reference price |
- Light vs Heavy Crude: Refers to API gravity (density); light crude has higher API gravity and is easier to refine.
- Sweet vs Sour Crude: Based on sulfur content; sweet crude has less than 0.5% sulfur, making it cleaner and more valuable.
- Price Differential: WTI and Brent prices often differ due to supply-demand dynamics, transportation costs, and regional factors.
- Strategic Importance: Crude oil prices impact global inflation, currency values, trade balances, and economic growth, making these benchmarks crucial for economic planning.
Question 2 of 6 AIIB and Other Institutions
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