Brent vs WTI: the two oil benchmarks, the spread and which CFD to trade

Brent and WTI are the two main crude oil benchmarks. WTI (West Texas Intermediate) is a light, sweet US crude priced for delivery at Cushing, Oklahoma, and traded mainly on NYMEX; Brent is a seaborne benchmark based on North Sea and related crudes, traded mainly on ICE Futures Europe and used to price most internationally traded oil. They usually move in the same direction, but the gap between them, the Brent–WTI spread, changes with US production, pipelines, storage and shipping costs, and occasionally it has blown out to tens of dollars.

For a CFD trader the choice between a "US Oil" and a "UK Oil" product looks trivial, but the two differ in settlement, expiry timing and the news that moves them. This guide focuses on those differences. For the general picture of how oil trades, what moves it and how oil CFDs work, read oil trading explained first.

The short version

• WTI: US crude, landlocked delivery point at Cushing, physically settled futures, priced most directly by US supply, US storage and US pipelines.
• Brent: North Sea-based seaborne crude, cash-settled futures, a reference for the global waterborne market and for crude grades in Europe, Africa and much of Asia.
• The spread: Brent has usually traded above WTI since 2011. The size of that premium mostly reflects the cost of getting US crude to the coast and onto a ship.
• Timing: for the same delivery month, Brent futures stop trading earlier than WTI, which affects headline comparisons and CFD roll dates.

Two different oils

Quality

Crude oil is graded by density (API gravity: higher means lighter) and sulphur content (low sulphur is "sweet", high sulphur is "sour"). Lighter, sweeter crudes yield more high-value products such as petrol and diesel with less processing, so they usually command higher prices than heavy, sour crudes. Both WTI and Brent are light and sweet. WTI is slightly lighter and sweeter than Brent, so on quality alone it would be expected to trade at a small premium, which is what it generally did before 2010.

Location

Quality is only part of the story; location usually matters more. WTI is delivered at Cushing, an inland storage and pipeline hub hundreds of miles from the Gulf Coast. Brent is loaded onto tankers at sea terminals and can be shipped anywhere. A barrel at Cushing has to travel by pipeline to the coast before it can compete in the world market, so its value reflects the cost and availability of that transport.

What "Brent" actually is today

The original Brent field in the North Sea has largely stopped producing. The benchmark now reflects a basket of North Sea grades (Brent, Forties, Oseberg, Ekofisk and Troll), and since 2023 cargoes of US WTI Midland crude delivered to Europe have also been included in the Dated Brent assessment, the price-reporting benchmark that underlies the physical market. In a sense, Brent now has some WTI inside it, which ties the two benchmarks more closely together.

Two different contracts

Settlement

• WTI futures (NYMEX) are physically settled. A holder of a long contract at expiry must take delivery of 1,000 barrels at Cushing. Most traders close or roll positions well before that point, but the obligation shapes how the price behaves in the final days.
• Brent futures (ICE) are cash-settled against the ICE Brent Index at expiry, with an option to convert to physical oil through an exchange-for-physical arrangement. No one is forced to find storage.

That difference explains April 2020. On 20 April 2020 the expiring May WTI contract settled at about minus $37.63 a barrel because holders without access to storage at a nearly full Cushing had to pay others to take their contracts. Brent futures, being cash-settled and tied to seaborne oil that could be stored on tankers, fell sharply that month but did not go negative. The oil trading guide covers the episode in detail; the point here is that settlement design can matter more than the oil itself.

Expiry timing

The two contracts stop trading at different points:

• WTI: trading in a delivery month ends around three business days before the 25th calendar day of the preceding month. The December WTI contract, for example, stops trading around the third week of November.
• Brent: trading ends on the last business day of the second month before the delivery month. The December Brent contract stops trading at the end of October.

So for most of each month, the "front-month" Brent contract is one delivery month further out than the front-month WTI contract. In mid-October, for example, the front-month WTI contract is November while the front-month Brent contract is already December. When a headline compares "Brent at X and WTI at Y", it is often comparing different months, and the difference partly reflects the shape of the futures curve rather than a true quality or location spread. Analysts who track the spread carefully compare the same delivery month.

Hours and liquidity

Both contracts trade nearly around the clock on weekdays, on CME Globex for WTI and on ICE for Brent, with a short daily break. Both are among the most liquid commodity futures in the world. WTI volume is concentrated in US hours; Brent sees relatively more activity during European hours. In practice CFD spreads on either are tightest when London and New York are both open. The instruments market hours tool shows the sessions in your time zone.

The Brent–WTI spread

The spread is usually quoted as Brent minus WTI. A positive number means Brent is more expensive.

A short history

• Before 2010. WTI usually traded at a small premium to Brent, roughly in line with its slightly better quality.
• 2011. Rising US output from shale and Canadian crude flowing south filled Cushing faster than pipelines could carry oil to the coast. WTI fell to a deep discount. According to the US Energy Information Administration, Brent's premium reached a record of almost $30 a barrel in September 2011.
• 2012 to 2014. New and reversed pipelines from Cushing to the Gulf Coast eased the bottleneck and the spread narrowed, though it stayed volatile.
• December 2015. The US Congress effectively repealed the long-standing ban on most crude oil exports. US exports grew rapidly in the following years, which tied WTI more directly to world prices. Since then the spread has broadly reflected the cost of moving oil from inland US fields to export terminals and across the Atlantic.
• 2020 onwards. Apart from the extreme dislocation around the April 2020 expiry, the spread has generally been a few dollars, moving with US export economics, freight rates and events affecting either region.

What moves the spread

• US production and Cushing stocks. Rising US output or swelling Cushing inventories tend to weigh on WTI relative to Brent. Falling Cushing stocks can do the reverse. The weekly EIA report includes Cushing stocks; the forthcoming guide to oil inventory reports explains how to read them.
• Pipeline and export capacity. When getting oil to the Gulf Coast or onto ships becomes harder or more expensive, WTI's discount widens.
• Freight rates. Higher tanker rates make it more expensive to ship US crude to Europe or Asia, which widens the discount needed for it to compete.
• Events outside the US. Supply disruptions in the Middle East, Africa or Russia, or decisions by OPEC+, tend to affect seaborne crude first, which can lift Brent relative to WTI.
• Refinery demand. US refinery outages, for instance during hurricane season, can reduce demand for crude at home and weigh on WTI.

None of this makes the spread predictable. It tells you what to read when the spread moves.

Which oil CFD should you trade?

Brokers label oil CFDs in many ways: "WTI", "US Oil", "USOIL", "Crude" or "CL" for WTI, and "Brent", "UK Oil", "UKOIL" or "BRN" for Brent. Before choosing, check the contract specification to see which benchmark and which contract month the product follows. Then consider:

1. The news you actually follow. If your analysis is built around the weekly EIA inventory report, US production and US data, WTI is the more direct expression. If it is built around global supply, OPEC+ decisions and Middle East or Russian news, Brent is closer to that story. In practice both react to all of these.
2. Your hours. Both are tradable for most of the day. If you mainly trade the European morning, Brent liquidity is relatively better at that time; in the US afternoon, WTI is the busier contract.
3. Costs at your provider. Compare typical spreads (not minimum spreads), commissions, financing rates and roll charges for both products. A gap of a cent or two in typical spread matters more than any theoretical difference between benchmarks if you trade often. How to compare trading costs shows how to add them up.
4. Roll dates. Because the futures expire on different schedules, a provider's Brent CFD and WTI CFD roll on different dates. If you hold positions for weeks, know when each roll happens and what adjustment applies. The forthcoming guide to CFD rollover and expiry goes into the mechanics.
5. Contract size and point value. Many providers use the same contract size for both, but not all. Size from the point value in each specification, not from habit.

There is no general answer to which is "better". The two are close substitutes most of the time, and the difference between them is small compared with the risk of the oil price itself.

Leverage limits

Both are commodity CFDs other than gold, so ESMA caps retail leverage at 10:1, a 10% initial margin, in the EU. The UK FCA applies the same cap. Negative balance protection applies to retail CFD accounts in the EU, but it does not prevent losing the full account balance. See ESMA leverage limits and negative balance protection.

Worked example: same risk, two products

The numbers below are illustrative, not current prices, and the contract sizes are examples.

You have a $10,000 account and risk 1% per trade, $100. Your provider offers WTI and Brent CFDs of 100 barrels per contract, so a $1 move is worth $100 per contract and a one-cent move $1.

WTI

• Buy at $76.04, stop at $74.54, $1.50 below.
• Loss per contract at the stop: 1.50 × $100 = $150.
• Size: $100 ÷ $150 = 0.67, rounded down to 0.6 contracts. Planned risk: $90.
• Notional: 0.6 × 100 × $76.04 = $4,562.40; margin at 10:1 about $456.

Brent

• Buy at $80.04, stop at $78.54, $1.50 below.
• Same loss per contract: $150. Same size: 0.6 contracts. Planned risk: $90.
• Notional: 0.6 × 100 × $80.04 = $4,802.40; margin about $480.

With the same stop distance in dollars the sizes come out identical, because the point value is the same. The margin differs only because the prices differ. What matters is whether $1.50 is a sensible stop for each market at that moment, which is a question of volatility and structure; see where to put a stop loss. The instruments position size calculator handles the arithmetic.

Worked example: trading the spread

Some traders take a view on the spread itself rather than on oil, by buying one benchmark and selling the other. The numbers are again illustrative.

• Open: buy 1 Brent contract at $80.00 and sell 1 WTI contract at $76.00. The spread is $4.00.
• Later: Brent is at $78.50 and WTI at $73.70. Oil has fallen, but the spread has widened to $4.80.
• Brent leg: (78.50 − 80.00) × 100 = −$150.
• WTI leg: (76.00 − 73.70) × 100 = +$230.
• Net: +$80, which is the $0.80 change in the spread × 100 barrels.

Things that make this harder than it looks:

• Two sets of costs. You pay the spread on both legs when opening and closing, and overnight financing applies to both positions, often as a net charge even though one is long and one short.
• Margin on both legs. Many CFD providers do not offset the two positions. At 10:1, the margin here is about $800 + $760 = $1,560, for a trade whose expected movement may be a dollar or two.
• Different roll dates. The legs roll at different times, so for part of each month you may be comparing different delivery months, and roll adjustments can change the apparent spread.
• Spreads can move a long way. The history above shows moves of tens of dollars, and in April 2020 the gap between expiring WTI and Brent was extreme. A spread trade is not low risk just because it is "hedged".

Common mistakes

• Comparing different months. Front-month Brent and front-month WTI often refer to different delivery months, so the headline spread mixes curve shape with the real difference between the oils.
• Assuming the CFD follows the spot price. Oil CFDs follow futures, directly or through a rolling construction. Check which contract your product uses.
• Forgetting roll dates differ. A trader holding both, or switching between them, can be caught by a roll on one but not the other.
• Choosing by the lower price. WTI usually being cheaper per barrel says nothing about cost or risk; size and stop distance do.
• Treating the spread trade as safe. Two leveraged positions with separate margins and costs can lose money on both legs if the spread moves the wrong way.
• Ignoring events. OPEC+ meetings, the weekly EIA report and weekend geopolitics can gap both markets; read gap risk and weekend risk.

Most retail CFD accounts lose money, and oil is one of the more volatile markets offered to retail clients. The risk warning explains the main risks.

Frequently asked questions

Why is Brent usually more expensive than WTI?

Mainly because of location. WTI is priced for delivery at an inland hub in Oklahoma, while Brent is seaborne and can be shipped anywhere. Since US output surged in the 2010s, WTI has generally needed to trade at a discount that covers the cost of moving it to the coast and across the ocean. On quality alone, WTI would be worth slightly more.

What was the biggest Brent–WTI spread?

According to the US Energy Information Administration, Brent's premium over WTI reached a record of almost $30 a barrel in September 2011, when pipeline bottlenecks trapped oil at Cushing. The spread narrowed once new pipeline capacity opened and US export restrictions were lifted at the end of 2015.

Why did WTI go negative but not Brent?

The expiring WTI contract in April 2020 required physical delivery at Cushing, where storage was nearly full, so some holders paid to get out of their contracts. Brent futures are cash-settled against an index and linked to oil that can be stored at sea, so Brent fell but stayed positive.

Do Brent and WTI CFDs roll on the same day?

Usually not. The underlying futures expire on different schedules, with Brent ending about a month earlier for the same delivery month, so CFD providers roll the two products on different dates. Your provider's specification or rollover calendar lists them.

Which is better to trade, Brent or WTI?

Neither in general. They are close substitutes. WTI is more directly tied to US inventories and production; Brent to global seaborne supply and OPEC+ news. Most traders choose based on the news they follow, the hours they trade and the costs their provider charges on each.

Is the Brent–WTI spread predictable?

No. It responds to US production, Cushing storage, pipeline and export capacity, freight rates and events in other regions, and its history includes long calm periods and sudden dislocations. Understanding the drivers helps explain moves after the fact; it does not make them forecastable.