DEFINITION of Brent Crude
Also known as Brent blend. This is a major trading classification of sweet light crude oil that serves as a major benchmark price for purchases of oil worldwide.
WHAT IT IS IN ESSENCE
It is one of three major oil benchmarks used by those trading oil contracts, futures, and derivatives.
This grade is described as light because of its relatively low density, and sweet because of its low sulfur content. This crude oil type is widely used because. It is easy to refine into diesel fuel and gasoline. And its relative ease of transporting makes trading so wide.
Brent crude is one of three major oil benchmarks used by those trading oil contracts, futures, and derivatives. The other two major benchmarks are West Texas Intermediate (WTI) and Dubai/Oman, though there are many smaller oil varieties.
Oil benchmarks provide a useful way for oil traders and speculators to know which type of oil they are trading. Oil from different fields varies in value thanks to its use in different industries, and varying ease of transport. Brent crude is the most traded of all of the oil benchmarks.
HOW TO USE
Everyone uses crude oil in a variety of products that are crucial to everyday modern life. However, ‘crude’ oil is unprocessed and generally comes right out of the ground/ocean. And it has minimal uses before processing into a final product such as gasoline.
Investors looking to invest directly in Brent crude have only several options. There are futures contracts available for trading the product. But there are currently no stocks or equity ETFs that invest in companies that produce Brent crude. Although oil firms that are producing in the North Sea, such as British and Norwegian firms could be a decent auxiliary play. There are, however, a number of ETP products that offer exposure to the commodity’s futures contracts either in a basket or pure-play form.