Brent oil: definition

Brent oil
Brent oil: definition

Oil is the most widely used energy source in the world with an estimated consumption of 31.7% of global primary energy in 2015. It accompanies the technological development of humanity on several levels and its importance is such that we can not do without it. If there are several types of oil, there is a lot more interest in Brent oil at European level.

Brent is a reference oil used, along with Dubai Crude and WTI (West Texas Intermediate), to define price changes. It is important to know everything about this oil before you start trading it on the stock market.

Origin of Brent oil

Brent is crude oil, the name of which refers to an oil deposit between the Shetland Islands and Norway, and also to a set of North Sea oilfields. It is made from the products of the Broom, Rannoch, Etive, Ness and Tarbert fields. The first letters of these fields were therefore taken to form the BRENT, which is now used as a reference crude oil.

The production of Brent oil is limited and this is explained by the fact that the deposit of the North Sea is already almost at the end of exploitation. A misunderstood situation, especially since the deposit in question has been exploited for only 45 years.

Brent, a reference on the European market

A combination of oils from several fields, Brent is the benchmark crude oil on the oil market in Europe, Africa and other Mediterranean countries. It is used by industry professionals to define price changes on NYMEX (New York Mercantile Exchange). Despite its limited production, its exchange price partly determines that of nearly 66% of the world's oil production.

If it represents the standard of OPEC member countries, Brent oil is not unanimous in the world oil market and this, because of its properties. It has a very high sulfur content and is heavier than WTI oil, a benchmark for setting the price of crude oil in America. In sum, Brent is less appreciated compared to WTI. Companies like HBS International managed by Tarek Bouchamaoui are positioning themselves on the oil market to take advantage of the rising oil price.

Brent valuation

The high level of sulfur in the composition of Brent makes it a polluting fuel of lower quality. As Brent remains a reference on several stock markets, major investors such as Tarek Bouchamaoui, the manager of HBS International, one of the leaders of the oil sector in Tunisia is positioned on Brent. Nevertheless, its price has an influence on the price of about two thirds of world production.

In Tunisia, Brent is a reference for the fixing of the price of crude by the actors of the sector, and this is explained by the country's membership in OPEC. This oil can be traded on all international markets (NYMEX, ICE and ROTTERDAM).