Q. The term ‘West Taxes Intermediate’, sometimes found in news to a grade of

Answer: (a) Crude oil

West Texas Intermediate (WTI) is a light, sweet crude oil that serves as one of the main global oil benchmarks.
- This grade is described as light crude oil because of its relatively low density, and sweet because of its low sulfur content.
It is sourced primarily from inland Texas and is one of the highest quality oils in the world, which is easy to refine.
WTI is the underlying commodity for the NYMEX’s oil futures contract.
WTI is often compared to Brent crude, which is an oil benchmark for two-thirds of the world’s oil contracts based on oil extracted in the North Sea.

Brent crude oil originates from oil fields in the North Sea between the Shetland Islands and Norway, while West Texas Intermediate (WTI) is sourced from US oil fields, primarily in Texas, Louisiana, and North Dakota.
WTI with a lower sulphur content (0.24%) than Brent (0.37%), is considered “sweeter”.
Both oils are relatively light, but Brent has a slightly higher API gravity, making WTI the lighter of the two.
- American Petroleum Institute (API) gravity is an indicator of the density of crude oil or refined products.
Brent crude price is the international benchmark price used by the OPEC while WTI crude price is a benchmark for US oil prices.
- Since India imports primarily from OPEC countries, Brent is the benchmark for oil prices in India.
Cost of shipping for Brent crude is typically lower, since it is produced near the sea and it can be put on ships immediately. Shipping of WTI is priced higher since it is produced in landlocked areas like Cushing, Oklahoma where the storage facilities are limited.