Tuesday , November 30 2021

Brent vs. WTI

Summary:
In thinking about benchmarks, does it matter right now which oil price to refer to? Jim H. and others have noted Brent is a more appropriate benchmark for gasoline prices. Figure 1: Log of ratio of WTI oil price to Brent oil price, % (blue, left scale), and dollar difference between WTI oil price and Brent oil price, $/bbl (red, right scale). NBER defined recession dates shaded gray. Source: EIA via FRED, and author’s calculations. Two of Jim’s posts on Brent, here and here.

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In thinking about benchmarks, does it matter right now which oil price to refer to? Jim H. and others have noted Brent is a more appropriate benchmark for gasoline prices.

Brent vs. WTI

Figure 1: Log of ratio of WTI oil price to Brent oil price, % (blue, left scale), and dollar difference between WTI oil price and Brent oil price, $/bbl (red, right scale). NBER defined recession dates shaded gray. Source: EIA via FRED, and author’s calculations.

Two of Jim’s posts on Brent, here and here.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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