Brent vs WTI Spread: CFD Trading, Charts and Drivers

In global energy markets, two names dominate every oil quote – Brent from the North Sea and WTI from Texas. These are not just types of crude, but global benchmarks that shape the pricing of millions of barrels traded daily through futures, CFDs, and physical contracts.

Understanding how these two reference oils interact is essential to grasp how does oil trade works. The price gap between them – known as the Brent-WTI spread – reflects shifts in supply, demand, geopolitics, and refinery capacity. When that spread widens or narrows, it signals deeper structural moves in the oil market: logistical constraints, export policies, or macro tensions.

For traders, this difference isn’t just theory – it’s a tradeable opportunity. The Brent WTI difference can be played through CFDs, allowing speculation or hedging without owning physical oil. Whether you’re analyzing the Brent WTI spread chart for arbitrage or testing correlation between both grades, trading the spread provides insight into the heartbeat of the global energy economy.

What Are Brent and WTI Crudes?

When traders talk about “the price of oil,” they are almost always referring to one of two benchmarks – Brent or WTI. Both are types of light, sweet crude, meaning they have low density and low sulfur content, which makes them easier and cheaper to refine into high-value products such as gasoline, diesel, and jet fuel.

In the trading world, this pair is often collectively referred to as Brent WTI crude, representing the two dominant standards of global oil pricing. Yet despite these similarities, their origins, pricing systems, and global influence are quite different – and these differences lie at the heart of the Brent WTI spread.

Brent: the global benchmark

Brent is extracted from a group of oilfields in the North Sea, including Brent, Forties, Oseberg, Ekofisk, and Troll – collectively known as the BFOET blend. This crude is light and sweet, with a sulfur content of around 0.37%, and serves as the reference price for roughly two-thirds of all internationally traded oil.

Its importance comes from both its geography and its accessibility: the North Sea offers direct seaborne export routes to Europe, Asia, and the Americas, which makes Brent highly liquid in global markets.

Brent is also the primary pricing base for ICE Futures Europe contracts, meaning most futures and derivatives tied to global crude use it as a foundation. Oil produced in Africa, the Middle East, and parts of Asia is often sold at a premium or discount relative to Brent.

This makes it not just a regional reference, but the world’s de facto crude benchmark, reflecting global supply and demand, as well as geopolitical conditions such as sanctions, wars, or OPEC policy changes.

Because Brent is waterborne, its price reacts quickly to shipping disruptions, port closures, or tanker insurance issues – factors that do not affect landlocked benchmarks like WTI. For this reason, traders often view Brent as more sensitive to international geopolitics and refinery margins in Europe and Asia.

WTI: the American reference

WTI (West Texas Intermediate) is the U.S. benchmark and one of the most traded energy contracts in the world. It’s sourced mainly from fields in Texas, North Dakota, and New Mexico, and delivered to the pipeline hub in Cushing, Oklahoma – often called the “crossroads of the American oil industry.” This location serves as the physical delivery point for the NYMEX WTI futures contract, part of the CME Group’s energy complex.

West Texas Intermediate has a slightly higher quality, with sulfur content around 0.24%, making it one of the “cleanest” crude oils in commercial production. Because of its light composition, it yields more gasoline and less heavy fuel oil during refining, which is advantageous for U.S. refineries focused on motor fuel output.

For much of the 20th century, WTI was considered the global pricing standard, but as U.S. export restrictions and regional logistical bottlenecks developed, Brent gradually took the lead as the more international reference. Still, WTI remains critical for domestic U.S. pricing, storage analysis, and inventory reports such as the weekly EIA Petroleum Status Report, which often moves the entire futures market.

Comparing the two

While both benchmarks tend to move together due to their shared exposure to global demand cycles, the West Texas Intermediate difference reflects distinct regional fundamentals. Brent is more exposed to international trade flows and OPEC decisions, while WTI is shaped by internal U.S. dynamics – pipeline capacity, refinery outages, and shale production.

The chart below summarizes their key attributes:

Feature	Brent	WTI
Sulfur content	~0.37%	~0.24%
API gravity	~38°	~39.6°
Main usage	Global pricing benchmark	U.S. benchmark for domestic pricing
Extraction region	North Sea (UK/Norway)	Texas, New Mexico, North Dakota
Transport	Seaborne (tankers)	Landlocked (pipelines to Cushing)
Futures exchange	ICE Futures Europe	NYMEX (CME Group)
Global influence	High (sets international contracts)	Moderate (regional but growing)

Together, these two benchmarks provide a complete picture of the oil market’s structure. Brent captures global liquidity and cross-border pricing, while WTI reflects the health of the U.S. energy sector – the world’s largest producer and consumer of crude. Their relative values – often displayed on a brent WTI spread chart – tell traders where supply is tightest, where refinery margins are shifting, and how arbitrage flows are moving between the Atlantic Basin and Asia.

In essence, Brent and West Texas Intermediate are two sides of the same coin: one ocean-based and global, the other landlocked and domestic. Their interaction defines how futures, spot, and derivatives markets align – and why understanding both is essential before trading the spread or analyzing oil volatility in any serious way.

Understanding the Brent-WTI Spread

The Brent-WTI spread is one of the most closely watched relationships in the global crude market. It represents the price difference between the two main benchmarks – Brent from the North Sea and WTI from Texas – and it’s typically expressed as Brent minus WTI. In other words, when the spread is positive, Brent trades at a premium, when negative, West Texas Intermediate is more expensive.

Traders track this differential to understand where supply, demand, and liquidity are shifting across regions — and this is exactly why the WTI Brent spread is important for analyzing global oil balance and trading opportunities.

What the spread reveals

At its core, the Brent WTI difference reflects how easily oil can move to where it’s needed most. Brent, being a seaborne crude, is easily shipped to refineries worldwide, while WTI, for much of its history, was landlocked within the U.S. pipeline system. Because of that, logistical constraints and export regulations often made WTI cheaper than Brent, even though it’s technically lighter and “cleaner.”

A look at any spread chart shows how this relationship has evolved. Before 2010, the spread hovered around zero – both grades traded almost equally. Then came a seismic shift.

The 2011-2012 divergence: when Brent soared

Between 2011 and 2012, the price gap exploded to nearly $25 per barrel, one of the widest differentials in modern history. Several factors aligned to create this dislocation:

Logistical bottlenecks: Rapid growth in U.S. shale output flooded inland storage hubs like Cushing, Oklahoma. With limited pipeline capacity to move crude to coastal refineries, inventories ballooned, depressing WTI prices.
Export restrictions: At the time, U.S. law prohibited most crude exports, meaning the excess oil couldn’t leave the country to meet global demand.
Global disruptions: Meanwhile, Brent was supported by geopolitical tensions – the Arab Spring, conflicts in Libya and Syria, and North Sea maintenance outages – which tightened international supply.

As a result, two markets that once moved in lockstep suddenly decoupled. The spread became a real-time indicator of U.S. infrastructure stress and geopolitical risk abroad.

After the shale revolution

The shale boom didn’t just reshape U.S. production – it redefined global oil flows. As pipelines expanded and the U.S. lifted its export ban in 2015, WTI began reconnecting with international pricing. The arbitrage between Brent and WTI narrowed as American crude started flowing to Europe and Asia. However, the spread still fluctuates depending on refinery maintenance, hurricane season, and OPEC decisions.

For instance, during periods of strong U.S. exports, the differential tightens because WTI gains global exposure. But when Gulf Coast terminals face congestion or storms, the gap widens again. These microshifts make the spread one of the most sensitive indicators of market structure and regional margins.

What traders watch on the chart

A TradingView spread chart visually captures these dynamics. When the line rises, Brent is gaining relative strength – usually due to tighter international supply or geopolitical risk.

When it falls, U.S. liquidity or production growth is pushing WTI higher. Correlation isn’t constant: the spread can swing from under $1 to more than $10, depending on trade flows and arbitrage incentives.

Professional traders use this data to identify cross-market opportunities. For example:

if Brent’s premium widens unusually fast, they might short Brent and go long WTI, expecting normalization;
if West Texas Intermediate outpaces Brent despite stable fundamentals, it could signal improving U.S. export margins or a weakening global outlook.

Today, the Brent WTI spread is a barometer for the health of global oil trade – it links U.S. shale output, OPEC policy, and worldwide refinery demand into one simple number. For investors, it’s a window into macro sentiment; for physical traders, it’s an operational metric guiding shipping routes and hedging decisions.

By tracking correlation between the two benchmarks and reading the Brent WTI spread chart, traders can gauge where arbitrage is profitable, how balanced the world’s supply truly is, and whether market liquidity favors the Atlantic Basin or the U.S. Gulf.

Drivers of the Spread (Supply, Demand & Geopolitics)

The Brent-WTI spread moves like a living organism – expanding, contracting, and occasionally inverting as global conditions shift. At its core, the spread reflects the tension between supply and demand, but it’s also shaped by geopolitics, infrastructure, and even the structure of the futures market. These forces combine to create cycles of premium and discount that traders interpret as early signals of changing market sentiment.

Below are the main drivers that define the relationship between the two benchmarks – each influencing how the Brent WTI difference evolves on charts.

Role of OPEC

Few players influence oil pricing more than the Organization of the Petroleum Exporting Countries (OPEC). Its production quotas directly affect the balance between Brent and WTI because OPEC’s output is primarily tied to Brent-linked contracts rather than WTI. When OPEC cuts production, the global market tightens, especially across seaborne supply chains, pushing Brent higher relative to West Texas Intermediate.

Conversely, when OPEC expands output or members exceed quotas, global supply increases and Brent’s premium often shrinks. This happens because U.S. crude – largely independent of OPEC – faces less competition abroad, while European and Asian refiners can access more Middle Eastern oil.

Historical examples prove the point:

in 2016, OPEC’s coordinated production cut supported Brent and drove the spread to nearly $4-5 per barrel;
in 2020, during the oil price war between Saudi Arabia and Russia, a flood of OPEC barrels caused Brent to crash faster than WTI, briefly narrowing the spread to near zero.

Thus, OPEC decisions ripple directly through arbitrage flows, influencing both liquidity and margins across global refineries.

Geopolitical Events

Geopolitics often moves the Brent–WTI spread faster than pure fundamentals. Because Brent is an international benchmark priced on seaborne cargoes, it reacts immediately to global tensions, while WTI, tied to the U.S. interior, responds mainly to domestic disruptions.

A few classic scenarios illustrate this dynamic:

Middle East conflicts or sanctions on producers like Iran tend to lift Brent sharply. Traders price in higher risk premiums for seaborne exports, widening the brent WTI difference;
Hurricanes in the Gulf of Mexico or U.S. refinery shutdowns hit WTI harder, as they disrupt local demand and pipeline throughput, often narrowing or even inverting the spread;
European energy crises, such as the 2022 supply shock after Russia’s invasion of Ukraine, widened Brent’s premium due to fears of restricted spot cargo availability and reduced liquidity in European terminals.

In short, Brent reflects global geopolitics, while West Texas Intermediate mirrors domestic logistics. A trader scanning a Brent WTI spread chart can often tell whether the market’s stress is international or local simply by how the spread behaves.

Market Structure

Beyond supply headlines, the internal mechanics of the futures curve also shape the spread. In commodity markets, prices don’t move in isolation – they follow the curve’s structure, defined by contango and backwardation.

Contango occurs when futures prices are higher than spot prices, signaling oversupply and weak immediate demand. This structure often weighs more heavily on WTI, which is tied to storage-heavy inland hubs like Cushing, where excess inventories accumulate.

Backwardation, by contrast, happens when spot prices exceed future delivery contracts, suggesting scarcity or tight short-term supply. Brent markets, exposed to global shipping and export routes, tend to shift into backwardation during geopolitical or OPEC-driven squeezes – widening the premium over WTI.

Another key factor is refinery maintenance. When U.S. refineries go offline for seasonal overhauls, domestic crude piles up, weakening WTI. But when global refineries ramp up ahead of travel or winter seasons, demand for seaborne barrels boosts Brent.

Summary Table: Key Drivers of the Brent-WTI Spread

Each of these factors doesn’t act in isolation – they interact constantly, forming the pulse behind the spread chart. A surprise OPEC cut can tighten global supply overnight, while a hurricane in the Gulf of Mexico might simultaneously pressure domestic margins and distort arbitrage flows.

Add in futures curve shifts (from contango to backwardation) and refinery outages, and you get a market where the premium or discount between Brent and WTI is in permanent motion.

The table below summarizes the most frequent drivers and their typical impact on the spread, helping traders read whether moves are driven by logistics, policy, or sentiment:

Driver	Mechanism	Impact on Spread
OPEC production cuts	Reduced global seaborne supply	Brent premium widens
OPEC output increase	More global barrels available	Spread narrows
Middle East conflict / sanctions	Risk premium for seaborne cargo	Brent rises vs WTI
U.S. hurricane or refinery outage	Domestic oversupply or reduced demand	WTI weakens; spread tightens
Contango (oversupply)	Storage builds, especially in Cushing	WTI drops relative to Brent
Backwardation (tight market)	Strong spot demand for exports	Brent strengthens
Pipeline or port congestion	Slower flow of U.S. crude exports	WTI discount widens
Improved export capacity	Easier access for U.S. producers	Spread narrows

The Brent-WTI spread is therefore more than just a pricing anomaly – it’s a lens into how supply, demand, and geopolitics collide. Understanding these drivers allows traders to anticipate changes in futures curves, optimize hedging strategies, and identify where arbitrage opportunities might appear next in a market that never stands still.

Trading Brent-WTI with CFDs

The Brent-WTI spread isn’t just an analytical tool – it’s a tradable opportunity. Thanks to CFDs (Contracts for Difference), traders can speculate on the brent WTI difference without handling physical oil or large futures contracts. This approach gives retail and professional traders alike access to a strategy long used by hedge funds and commodity desks: trading the spread itself rather than a single crude benchmark.

The idea is simple. Because Brent and WTI often move together but not perfectly, a trader can profit from their relative changes. If Brent looks undervalued compared to WTI, you might go Long Brent / Short WTI – betting the spread will widen.

If Brent trades too high, you can invert the position – Short Brent / Long WTI – expecting the spread to tighten. In practice, this creates a hedged structure: you’re exposed to the difference between the two oils, not their absolute prices.

This relative setup can help neutralize broader market risk. Even if the entire oil market drops due to a macro shock, your profit or loss depends mainly on how one grade performs relative to the other. That’s why many consider it a form of hedging, though it still carries volatility and leverage risks through margins and execution timing.

Step-by-step guide for beginners

Before the list, one important point: trading the WTI brent spread options via CFDs requires understanding both sides of the equation – how global supply and demand influence Brent, and how U.S. inventories and infrastructure affect WTI. With that in mind, here’s a simplified workflow for a first spread trade:

Choose a broker offering Brent and WTI CFDs. Make sure the platform provides both benchmarks with reasonable liquidity and low execution costs. Popular choices include brokers using MetaTrader, cTrader, or proprietary web platforms. Check available leverage and ensure margin requirements fit your strategy.
Identify the right moment to trade the spread. Watch the Brent WTI spread chart or correlated pairs on TradingView. Look for moments when the spread widens abnormally due to short-term shocks – such as an OPEC announcement or refinery outage. If you expect reversion, open opposite positions to capture that normalization.
Set a clear stop-loss and position size. Even though the trade is hedged, the spread can still move sharply. Use a predefined stop level beyond recent volatility zones, and monitor margins closely. Effective execution means closing both legs simultaneously to maintain balance.

After the list, it’s important to stress that CFD spread trading isn’t risk-free. While it reduces exposure to broad price swings, traders still face volatility, funding costs, and timing errors between positions. Moreover, CFDs are leveraged instruments – small moves can magnify results.

Still, for disciplined traders, Brent–WTI spread trading through CFDs offers a compact, efficient way to engage with global oil dynamics. It blends macro understanding, technical timing, and structured risk management into one strategy – making it an ideal bridge between physical commodity trading and financial derivatives.

Risks and Considerations in Oil Spread Trading

Trading the Brent–WTI spread may seem safer than speculating on outright oil prices, but it carries its own set of risks. Even though the trade is hedged – long one grade and short the other – volatility in global energy markets can quickly turn a small divergence into a major drawdown. Understanding these risks is critical before deploying real capital or using leverage.

Volatility and margin exposure

The first and most visible challenge is volatility. Oil is among the most reactive commodities on the planet – daily swings of 3–5% are common, and during major geopolitical shocks, the spread itself can move by several dollars within hours. When this happens, leveraged CFD positions face significant margin pressure.

Because spread trades involve two correlated positions, both legs consume margin simultaneously. A sudden expansion of the differential can trigger margin calls or forced liquidation, even if the broader direction later returns to normal. That’s why traders need to size positions conservatively and monitor execution closely, especially around key events like OPEC meetings or U.S. inventory data.

To manage this, keep free margin at 2-3 times your initial requirement and avoid opening both positions at full leverage. Treat the spread as a relative, not a low-risk, position – it can still amplify losses if volatility spikes or liquidity thins out.

Geopolitical shocks and structural risk

Another critical factor is geopolitics. While WTI is heavily tied to domestic U.S. logistics, Brent reflects the broader international supply chain – meaning that global crises often distort the spread. Wars, sanctions, or natural disasters can abruptly change shipping routes, refinery operations, and even the structure of futures curves.

For example:

a Middle East conflict or sanctions on a major exporter like Iran or Russia usually increase the Brent premium sharply, as traders price in risk to seaborne supply;
conversely, hurricanes in the Gulf of Mexico can temporarily reduce U.S. refinery throughput, weakening WTI and narrowing the spread;
sudden OPEC announcements or unplanned production cuts often shift market correlation overnight, making any existing hedge less effective.

These events can’t be predicted, but they can be mitigated. Traders should track news flow, maintain economic calendars, and limit exposure before weekends or major geopolitical meetings.

Managing leverage and applying hedging principles

Finally, one of the most underestimated risks in oil spread trading is leverage discipline. Because difference typically moves in small increments, traders are tempted to use high leverage to magnify returns. This works well in stable markets but becomes catastrophic when volatility explodes.

Prudent traders use hedging logic not just between Brent and WTI, but also in position sizing. Instead of equal nominal exposure, balance each leg by dollar value or volatility-adjusted weighting. This helps align risk and avoids unintentional bias if one contract moves faster than the other.

A few essential guidelines:

Keep leverage moderate – ideally no more than 5:1 for CFDs;
Use automatic stop-losses to control tail risk;
Reassess exposure weekly as margins and futures pricing structures change.

In essence, oil spread trading demands the same rigor as any institutional derivatives strategy. It’s not about predicting absolute prices but about managing relationships between two volatile benchmarks influenced by supply, demand, and geopolitics.

Success comes not from guessing the next move of Brent or WTI, but from controlling leverage, respecting volatility, and treating risk management as the core of the trade – not an afterthought.

FAQs about Brent vs WTI Spread

Why is WTI cheaper than Brent?

WTI often trades at a discount due to logistics – it’s landlocked and depends on U.S. pipelines, while Brent is seaborne and easier to export. Slightly higher quality doesn’t offset these transport and export limitations.

Why is the Brent-WTI spread important?

It’s a real-time indicator of the global oil balance between regional supply and demand. When the spread widens, it often signals tightness in international markets or shifts in refinery margins.

Can I trade Brent-WTI with CFDs?

Yes, many major brokers offer WTI Brent spread options through CFDs, allowing traders to speculate on the difference without physical delivery. It’s accessible to retail traders but still requires careful margin and hedging control.

What is contango/backwardation?

Contango means future prices are higher than spot, usually during oversupply, while backwardation means the opposite – near-term contracts cost more when demand is strong. These structures directly influence how the spread behaves over time.

How do geopolitical events affect the spread?

Conflicts or sanctions in oil-producing regions push Brent higher by disrupting seaborne flows. In contrast, U.S. storms or refinery outages mostly affect WTI, sometimes narrowing the differential.

Conclusion

The Brent-WTI spread is both a market indicator and a trading instrument. It reflects real shifts in supply, demand, and geopolitics, while offering traders a direct way to act on those imbalances. Knowing how to read and trade that difference turns a pricing gap into a calculated opportunity.