Every broker lists two oil instruments and almost nobody explains the choice. The tickers look interchangeable, the charts move together most days, and then a pipeline outage or a tanker attack pulls them apart by several dollars and the trader holding the wrong one finds out why the names differ.
West Texas Intermediate and Brent are contracts on physical crude oil with different delivery arrangements. Grade is the smaller part of the story. Geography is the larger one.
Two barrels, two delivery points
WTI is a light, low-sulphur crude that settles for physical delivery at Cushing, Oklahoma, a landlocked tank hub in the middle of the US pipeline network. It prices North American supply and it is sensitive to anything that affects storage or transport within the United States: pipeline capacity, refinery maintenance in the Gulf, a cold snap that freezes wellheads in the Permian.
Brent is waterborne. It is built on a basket of North Sea grades and prices crude that can be loaded onto a ship and sold anywhere, which is why it is the reference for a much larger slice of global trade. When something happens to shipping lanes or to a producer outside North America, Brent reacts first and harder.
The gap between them is a logistics number more than a quality number. When US production is heavy and hard to move to the coast, WTI trades at a discount to Brent. When international supply is under threat, that discount widens for a different reason. It has been unusually narrow and unusually wide in different decades, and it briefly inverted when export restrictions were in place. Trading the spread itself is a professional game requiring both legs, so most retail traders should treat it as information rather than a position.
The calendar that actually moves oil
Oil has a weekly data rhythm that few other instruments match. The US Energy Information Administration publishes its petroleum status report on Wednesday mornings Eastern time, showing crude, gasoline and distillate stock changes. The American Petroleum Institute publishes its own estimate on Tuesday evening. Both can produce a fast move, and the two frequently disagree, which is part of why Wednesday's reaction is often larger than the headline number deserves.
On a longer cycle sit the OPEC+ ministerial meetings and the monthly reports from OPEC and the International Energy Agency. Quota decisions matter less than compliance with them, and the market usually prices the expected decision days ahead, so the move comes from the surprise in the communique rather than the number itself. Track these on an economic calendar and treat oil the same way you would treat any scheduled release, as covered in news trading.
Then there is everything unscheduled. Sanctions announcements, refinery fires, hurricane tracks in the Gulf of Mexico, and any threat to a chokepoint like the Strait of Hormuz. These arrive without warning and gap the price, which is the main argument against carrying oversized oil exposure through a weekend.
Oil is a high-volatility instrument with gap risk from events that happen while the market is closed. A position size that feels reasonable on EURUSD can be several times too large on crude for the same account risk. Size from the instrument's range, not from habit.
Expiries, rollover and the shape of the curve
This is where oil CFDs surprise people. Futures contracts expire monthly. A CFD that tracks the front month must therefore be rolled into the next month, and the two contracts almost never trade at the same price. When the far month is more expensive, the curve is in contango. When it is cheaper, the curve is in backwardation.
Brokers handle the roll in one of two ways. Dated instruments simply expire and the chart jumps to the new contract's price, with a cash adjustment posted so the roll itself is economically neutral. Continuous cash instruments hold a synthetic price and charge or credit financing daily, which shows up in the account the same way a swap rate does on a currency pair. Read the contract specification before the first trade, because a chart gap on roll day looks exactly like a loss until the adjustment appears.
The curve also carries a warning. In April 2020 the expiring WTI contract settled below zero, because holders faced physical delivery into storage that was effectively full and paid to get rid of it. Retail CFDs are not physically deliverable, but the episode reset every assumption about oil having a floor, and platform risk controls across the industry were rewritten afterwards.
How oil behaves against everything else
Crude does not trade in isolation. It correlates with the Canadian dollar and other producer currencies, an effect covered in oil and the Canadian dollar, and it feeds into inflation prints that in turn move rate expectations and the dollar. A strong dollar tends to weigh on dollar-denominated commodities, though the relationship is loose enough that it should never be the whole reason for a trade.
Compared with metals, oil is more news-driven and less flow-driven. Gold responds to real yields and risk appetite over weeks. Oil responds to a tanker. That difference should change how long you hold and where the stop goes, and it argues for defining exit levels before entry rather than during the reaction.
Liquidity concentrates in the London and New York overlap, when both the physical desks and the futures pit hours are active. Outside that window spreads widen, especially in the hours around the daily break, and a stop placed in thin conditions is more likely to be reached by a spread flare than by a real move. Leveraged trading in any of these instruments carries a high risk of loss.
"People pick the oil symbol that was at the top of the watchlist and then wonder why the news they read all week is moving the other chart. Choose the barrel that matches the story you are trading."
— Alex Onta, Executive Director, SINGUARD
Key Takeaways
- WTI prices inland North American crude at Cushing, while Brent prices seaborne North Sea grades and reacts first to international supply events.
- The weekly EIA inventory report and OPEC+ meetings drive the scheduled moves, and the surprise against expectations matters more than the raw figure.
- Oil CFDs sit on expiring futures, so know whether your instrument rolls with a cash adjustment or holds a continuous price with daily financing.
- Gap risk from unscheduled supply events makes position sizing from the instrument's own range more important here than on major currency pairs.
Frequently Asked Questions
What is the difference between WTI and Brent?
WTI is a light sweet crude priced for delivery inland at Cushing, Oklahoma, and it reflects North American supply. Brent is a waterborne benchmark based on North Sea grades and it prices a much larger share of internationally traded crude. WTI is slightly lighter and lower in sulphur, but the practical difference for a trader is that the two react to different supply news.
Why does my oil CFD price differ from the futures price?
Most oil CFDs track a specific futures contract month. When that contract nears expiry the broker rolls to the next month, and because the two months rarely trade at the same price the chart gaps or a cash adjustment is posted to the account. Continuous cash oil instruments smooth this with a daily financing charge instead.
When are the weekly US crude inventory numbers released?
The US Energy Information Administration publishes its weekly petroleum status report on Wednesday mornings US Eastern time, with the schedule shifting a day when a public holiday falls earlier in the week. The American Petroleum Institute publishes its own estimate the previous evening, and oil often moves on both.