Educational content. This article explains why Brent crude oil usually trades above WTI and what moves the gap between them. It does not constitute investment advice or a recommendation. CFD trading carries significant risk of loss and may not be suitable for all investors.
Brent usually trades at a premium to WTI because the two benchmarks are priced in different places. WTI is priced at Cushing, Oklahoma, an inland hub, while Brent reflects seaborne crude from the North Sea. The gap mostly measures transport and export cost, and it is not a constant.
This article covers the pricing-point mechanism, the cost figures published by the US Energy Information Administration, what widens and narrows the gap, and what the gap means for CFD positions on UKOIL and USOil. The numbers are arithmetic and sourced data, not forecasts.
What Is the Brent-WTI Spread?
The Brent-WTI spread is the Brent price minus the WTI price, quoted in US dollars per barrel. A positive number means Brent is more expensive. It is a spread between two crude benchmarks, not the broker spread described in what is the spread in trading, which is the bid-ask cost of one instrument. This article uses "gap" or "Brent-WTI spread" for the first meaning and "broker spread" for the second.
Both benchmarks describe light, sweet crude oil. WTI (West Texas Intermediate) is delivered at Cushing, Oklahoma. Brent is the benchmark for crude loaded from the North Sea. They are close substitutes, which is why the gap is normally small relative to the price level, and why it is worth explaining when it is not.
Why Does Brent Usually Trade Above WTI?
Brent usually trades above WTI because WTI is landlocked and Brent is not. A barrel at Cushing must travel by pipeline to the US Gulf Coast and then by tanker to reach a buyer overseas. A barrel of Brent is already loaded at sea. Whatever it costs to bring WTI to the same buyer is a cost that Brent does not carry, so the WTI price at Cushing sits lower by roughly that amount.
The EIA states this directly in its Today in Energy note of 15 November 2017, "Transportation constraints and export costs widen the Brent-WTI crude oil price spread". It says the spread reflects the cost of moving crude from Cushing to the US Gulf Coast and of exporting it to Asia. Two figures from that note frame the normal case:
- Moving crude from Cushing to the Gulf Coast typically costs about USD 3.50 per barrel when pipelines are not constrained.
- Shipping WTI from the US to Asia costs about USD 0.50 per barrel more than shipping Brent from the North Sea to Asia.
That is the logic of an arbitrage ceiling. If the gap rose far above the cost of moving a barrel, buyers would prefer US crude, demand for WTI would rise, and the gap would tend to close. If the gap fell below that cost, exporting would stop being worthwhile. In a market with free-flowing pipelines and open export routes, the gap tends to stay near the cost of the journey.
How Much Can the Spread Widen? The EIA Data Points
The spread widens when the journey becomes harder or more expensive, and the EIA gives a dated example. In the same 2017 note it reports that WTI averaged USD 2 per barrel below Brent in the first eight months of 2017, then USD 6 per barrel below in September and October 2017. The EIA linked the change to pipeline constraints from Cushing and the Permian basin to the Gulf Coast, with Cushing inventories 51 percent above the five-year average at the time.
The same note states the general rule: near-term changes in the spread generally come from changes in pipeline capacity or US crude production. When production grows faster than pipeline capacity, crude backs up inland and the WTI discount widens. When new capacity opens, the discount narrows.
| Period (EIA, 15 November 2017) | WTI discount to Brent, USD per barrel |
|---|---|
| January to August 2017, average | 2 |
| September to October 2017, average | 6 |
Source: US Energy Information Administration, Today in Energy, 15 November 2017. These are historical figures, not current market data.
The table also shows the limit of a pure transport-cost story. A USD 2 gap and a USD 6 gap both occurred within one year, with the same two benchmarks, so a fixed "fair" gap does not exist. The gap is a moving price of logistics.
What Else Moves the Gap?
The gap responds to anything that changes the relative cost or demand of inland US crude versus seaborne crude. The drivers below follow from the mechanism above; the EIA note documents the first two.
| Driver | Effect on WTI relative to Brent | Mechanism |
|---|---|---|
| Pipeline capacity from Cushing and Permian to the Gulf Coast | Constrained: WTI weaker, gap wider. Expanded: gap narrower | Inland crude backs up when it cannot reach the coast |
| US crude production | Faster growth than pipelines: gap wider | More barrels compete for the same transport capacity |
| Cushing inventories | High stocks: WTI weaker | Stored barrels signal inland oversupply |
| Export shipping cost to Asia | Higher freight on the US route: gap wider | WTI must be discounted to compete with Brent |
| Region-specific supply disruption | Depends on where the disruption is | A shock at sea affects Brent first; a shock in US storage or pipelines affects WTI first |
Two points deserve emphasis. First, none of these drivers is a price forecast. They explain why the gap has the size it has, not where it goes next. Second, the drivers can offset each other, so a single headline rarely moves the gap in a clean direction. Broader oil drivers such as inventory reports and OPEC decisions are covered in fundamental analysis of commodities, and this article does not repeat them.
UKOIL vs USOil: The Feed Snapshot
The Vanto feed lists Brent as UKOIL and WTI as USOil, both in the energies class. Both are quoted in USD per barrel to three decimals and both have a contract size of 100 barrels per lot in the feed.
| Feature | UKOIL (Brent) | USOil (WTI) |
|---|---|---|
| Bid | 102.811 | 90.921 |
| Ask | 102.968 | 91.052 |
| Mid price | 102.889 | 90.987 |
| Contract size (barrels per lot) | 100 | 100 |
| Notional value of 1 lot, USD | 10,289 | 9,099 |
| Margin on 1 lot at 1:100, USD | 102.9 | 91.0 |
| Minimum volume (lots) | 0.1 | 0.1 |
| Notional value of 0.1 lot, USD | 1,029 | 910 |
Source: Vanto feed snapshot, 10 October 2026. Prices change continuously; the figures illustrate the arithmetic only.
Vanto's two oil symbols are quoted as spot-style CFDs, so the difference between UKOIL and USOil need not equal the benchmark spread between Brent and WTI futures, and this article does not quote the snapshot difference as if it were the benchmark spread. Which contract or price a CFD quote follows is stated in the symbol specification in MT5. A dated external source for the futures benchmarks is the way to read the logistics gap itself.
Worked Example: What the Gap Is Worth in Dollars
The gap converts to money through the contract size. One lot is 100 barrels in the feed, so a 1 USD per barrel move in either price changes the lot's value by 100 USD. The gap figures below are hypothetical round numbers, not market data.
Gap in dollars on one lot of each:
- Suppose Brent is 5.00 USD per barrel above WTI.
- Barrels per lot: 100.
- Gap value for one lot: 5.00 x 100 = USD 500.
What a change in the gap does to an offsetting pair. Suppose a trader holds a long on one benchmark and a short on the other, the structure discussed in pair trading in commodities. The profit or loss depends only on how the gap changes, not on the price level. If the gap moved from 5.00 to 6.00 (a rise of 1 USD) and the position was long UKOIL and short USOil at 1 lot each, the pair would gain 1 x 100 = USD 100, before costs. If the gap narrowed by 1 USD, the pair would lose USD 100. Each leg also pays its own broker spread on entry, so the pair starts with two costs, not one.
Margin. At the energies cap of 1:100, one lot needs about 1 percent of notional: 10,289 / 100 = about USD 103 on UKOIL and 9,099 / 100 = about USD 91 on USOil. Leverage amplifies losses as well as gains. In the example above, a 1 USD adverse move in the gap is a USD 100 loss, which is larger than the roughly USD 91 to 103 of margin that one lot of a single leg requires. The margin call level is 100 percent and the stop-out level is 50 percent. What is margin in trading explains the standard calculation.
Does Holding Both Legs Remove Oil Price Risk?
An offsetting pair removes most of the exposure to the general level of oil, but it does not remove risk. It replaces a bet on the oil price with a bet on the gap, and the gap can move against the position, as the 2017 EIA figures show: the gap tripled within a year.
Three further risks apply to CFD pairs:
- Two broker spreads. Each leg has its own bid-ask cost, and the feed shows 0.157 for UKOIL and 0.131 for USOil in this snapshot. Snapshot values are unrepresentative of average trading conditions, so treat them as an illustration of two costs, not a quote.
- Financing on both legs. Both energy CFDs follow the same sign pattern in the feed: the long side is credited and the short side is charged, and the triple swap day is Friday. A long UKOIL and short USOil pair therefore has a different financing profile on each leg. See what is swap in trading and what is triple swap day. Swap values change and are shown in MT5.
- Different contracts. The two instruments can reference different contract months. A gap that includes a calendar effect behaves differently from a pure location gap. Basis trading and spread trading explain these distinctions.
When the Premium Rule Breaks
Brent does not always trade above WTI. The premium is a tendency from logistics, not a law. The gap can narrow to near zero when pipeline capacity is ample and export routes are open, and it can reverse when a supply or storage event hits seaborne crude harder than US crude. A trader who assumes the premium is fixed will misread any such period.
Common mistakes when reading the gap:
- Treating the gap as mean-reverting by default. A structural change, such as new pipeline capacity or a sustained production increase, can move the whole range, and an old average then misleads.
- Comparing different contract months. A quote on a later delivery month can sit above or below the front month. Compare like with like.
- Ignoring the lot value. One lot of each leg is 100 barrels, so a small change in the gap is a visible amount of money. Check the dollar value before sizing.
- Forgetting both broker spreads. An offsetting pair pays two costs on entry and two on exit.
- Mixing the two meanings of "spread". The Brent-WTI gap and the broker spread are different quantities; only the second is a trading cost.
Frequently Asked Questions
Is Brent always more expensive than WTI?
No. Brent has usually been priced above WTI in recent years, but that is a tendency, not a rule. The EIA reported WTI USD 2 per barrel below Brent on average in early 2017 and USD 6 below in September and October 2017, and the sign and size of the gap can change with logistics, inventories and contract months.
Why is WTI cheaper than Brent?
WTI is priced at Cushing, Oklahoma, an inland hub. Crude there must travel by pipeline to the Gulf Coast, then by tanker to foreign buyers. The EIA estimated the pipeline leg at about USD 3.50 per barrel in 2017, and that cost is reflected in a lower inland price.
What is a normal Brent-WTI spread?
There is no single normal value. The EIA data in this article show USD 2 per barrel for most of January to August 2017 and USD 6 in September and October 2017. The gap also depends on how a CFD quote is built, so the difference between two CFD prices need not equal the benchmark spread.
How do I read the Brent-WTI gap in MT5?
Compute UKOIL mid minus USOil mid. The mid is the average of bid and ask, for example (102.811 + 102.968) / 2 = 102.889 for UKOIL in the 10 October 2026 snapshot. Both symbols are 100 barrels per lot, so the difference per lot is the gap multiplied by 100. This is the difference between two CFD quotes, which need not equal the futures benchmark spread.
How much margin do UKOIL and USOil need?
Energies have a maximum leverage of 1:100, so one lot needs about 1 percent of notional. At the snapshot prices that is roughly USD 103 on UKOIL and USD 91 on USOil per lot. Margin call is at 100 percent and stop-out at 50 percent, and leverage magnifies losses as well as gains.
Does the Brent-WTI gap predict oil prices?
No. The gap describes the relative cost of two benchmarks, and it does not forecast the direction of either one. A wide gap can coincide with rising or falling oil prices, so it is an input for understanding the market, not a signal on its own.
Calculate the Numbers Before You Trade
The arithmetic above, lot value, margin and the dollar value of a gap move, is the same for any instrument in the feed. The trading calculator applies it to UKOIL, USOil and the other symbols using current feed data, so you can check the notional, margin and the effect of a 1 USD move before sizing a position.
Risk warning. Trading securities, futures, options, and contracts for differences are complex financial instruments that require knowledge and understanding. Prices can fluctuate significantly and securities may become valueless. Investors may incur losses exceeding the potential for profits. Trading on margin can result in losses greater than the amount initially deposited. Past performance is not necessarily a guide to future performance. The information in this article is for educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instrument. Consider whether CFD trading is appropriate for your circumstances and seek independent advice if necessary.