Brent (Brent Crude) it's a benchmark grade of oil, produced from in the North Sea. The grade name comes from mine field in the North Sea, opened in 1970. Actually, the crude oil blends can be called Brent, Oseberg and Forties between the coasts of Norway and Scotland. Brent " is one of the most oil brands, which are being sold on the main world oil bourses. The Brent oil price is the basis for priceforming since the 1971 for about 40% of oil grades all over the world, particularly, for russian oil Urals. That's why this grade is called benchmark. The price of oil used to be by 1 dollar/bl lower than the WTI price and by 1 dollar/bl higher so called OPEC Reference Basket of crudes. However, this paruty rate was changed in 2007 and the Brent oil is qouted with the WTI premium. At a present time is being disscussed the justification of further using the Brent oil brand as a basis for price setting on the world market. This is primarly due to the weakening crude production in the North Sea, which leads to the fall of liquidity and the confusions during the price setting both for the crude oil blends and other oil brands.
Urals sour crude oil grade (sulfur content about 1.3%), which represents a crude oil blend, produced in Khanty-Mansiisk autonomous district and Tatarstan. Main producers of Urals oil are the following companies: Rusneft, Lukoil, Surgutneftegaz, Gazpromneft, TNK-VR and Tatneft. The russian oil price is determined by discounting of prices for Brent, as russian oil is believed to be less qualified due to high sulfur content and hard cyclic carbonhydrates. Recent time in Russia were taken actions to raise the quality level of Urals oil by excluding the sour tartar oil (in Tatarstan Republic are going to be built new distillation capacities to make gasoline from a local oil in order not to run it in the pipeline.) West Siberian oil has acceptable quality. Abroad it is known as Siberian Light brand. In Russia a futures for Urals grade oil is being traded in FORTS market at the RTS stock exchange.
WTI (West Texas Intermediate) oil brand, which is produced in Texas (USA), the consistence is 40 API, sulfurcontent - 0,4-0,5 %, mostly used for gasoline manufacturing and that is why this oil grade is in strong demand, especially in the USA and China.
The crude oil market participants
You should get acquainted with one of the most stable and affective instruments of capital saving. Nowadays almost every interested person can have an access to the world gold market and invest his funds to this precious metal. Moreover gold may be not only as dead weight but also percentage deposit. You may use gold in forward transactions, which gave tangible profit. This is very effective to invest in gold in the period of crises, when other investment instruments can not give the same result.
Gold is the most old and effective measure of capital and wealth dimension. Other precious metals were used for the same purposes. Generations were replacing each other and gold was as measure equivalent and at one and the same time payment facility and commodity for everybody. System of gold standard made a great influence on world economy development in XIX-XX centuries. National borders receded in the face of gold and it served as the main world currency system till 70s XX century, due to this operations with precious metals were under strict control. Mostly all transactions were made on the level of states monetary authorities and international financial organizations.
However, as a result of contradictions within the system qualitative changes took place and currency rates become floating. As consequence golds role was changed, legally it was excluded from the world currency turnover. Liberalization of gold deals began, rights of individuals to physically possession of metals were widen. Market of precious metals was transformed, not only market structure was changed but also its members and spectrum of transactions. Nowadays gold is not more payment facility, however it has not leave the system of economic relationship. Today world gold market constitutes combination of internal and international markets, which are almost not under governments control. All these guarantees 24 hours global trading not only of precious metals but also of their induced instruments.
Demand structure at world market of gold may be nominally divided into 3 sectors: hoarding at all levels, industrial and domestic consumption, speculative operations. Offer consists of precious metals, private and government reserves, processing of secondary raw materials (gold) and illegal traffic. The main resources of offers are gold producers, main buyers those who use it for industrial purposes. Both appear at market irregularly due to different factors. However, we will touch upon lifts and recessions in the market of precious metals later.