Sulphur content and the viscosity of crude oil are what classify them. When it comes to viscosity, the classification would be heavy and light; heavy for higher viscous crude and light for lower viscous crude. For sulphur content, crude oil with a higher sulphur are classed as sour and for crude with little sulphur content, it will be classed as sweet. Usually, it follows that when crude is heavy, it is also sour and when it is light, it is also sweet. Thus, crude oil is classified into 2 categories, which are heavy sour crude oil and light sweet crude oil. When it comes to pricing, the light sweet crude oil commands a higher price because it will be easier and a lot cheaper to refine than the heavy sour crude oil.
The WTI or West Texas Intermediate Crude
The NYMEX or the New York Mercantile Exchange uses West Texas Intermediate crude or WTI as their benchmark for the Exchange’s oil futures contracts. WTI is classed as light crude, much lighter than Brent crude. It is also much sweeter than Brent since it only contains a very minimal sulphur content of 0.25 %. Because of its very low viscosity and minimal sulphur content, it is considered high quality and excellent grade of oil good for refining as gasoline. It has been noted that the production output for WTI has been steadily declining. Notwithstanding this, WTI is still used as the benchmark in America and is quoted 5 to 6 dollars over and above the OPEC basket price.
North Sea Brent Crude
From the North Sea, we have the Brent Crude. Brent is used as the benchmarks for other types of crude by traders in Europe and Africa. It is priced 4 dollar more per barrel against the OPEC Basket price and of course, discounted 1 to 2 dollars lower than the WTI. Brent actually comes from the oil fields in Brent and Ninian in the North Sea. Although it is a little bit heavier and less sweet than WTI, it is still ideal for refining as gasoline. Brent is processed in refineries located in North Western Europe where most of it is also consumed. And just like WTI, Brent production is also in decline.