Previous Year Question
The term “West Texas Intermediate”, sometimes found in news, refers to a grade of:
crude oil
bullion
rare-earth elements
uranium
Correct Answer: A
Detailed Solution
West Texas Intermediate (WTI) is a particular grade of crude oil and one of the world’s major oil-price benchmarks. It is produced primarily in the United States.
Its principal characteristics are:
It is a light crude oil because it has a relatively high API gravity. A higher API gravity generally indicates oil of lower density.
It is a sweet crude oil because its sulphur content is relatively low—approximately 0.24%.
Its low sulphur content and light density make it comparatively easier to refine and allow a relatively high yield of valuable products such as petrol and diesel.
Cushing, Oklahoma is the principal physical delivery point for WTI futures.
A standard WTI futures contract traded on the New York Mercantile Exchange represents 1,000 barrels of crude oil.
WTI, Brent and Dubai/Oman are regarded as three major crude-oil benchmarks. WTI principally provides a reference price for the American market, Brent for European and wider international markets, and Dubai/Oman for Asian markets.
Therefore, WTI is neither bullion, a rare-earth element nor uranium. It is a grade of crude oil.