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Screenshot of a breaking news alert e-mail from Q2 2017
Australian retail FX firm Pepperstone has today announced that it has increased its product range by adding two new commodity pairs which are tradable against the US Dollar.
The two pairs are XBR/USD (Brent Crude/US Dollar) and XTI/USD. XTI/USD is a spot commodity pair based on West Texas Intermediate crude oil, or WTI, which is a light ‘sweet’ oil traded in Cushing, Oklahoma, with the word ‘sweet’ being used to refer to the oil’s low sulphur content. XTI/USD can be considered US Oil, and is heavily affected by developments in North America.
The addition of these two pairs represents the second expansion of instruments by Pepperstone in the space of one week, as the firm recently added ZAR/JPY (South African Rand/Japanese Yen) to its spot FX product range.
Pepperstone considers that since the early 2000s and especially following the global financial crisis, a combination of lower interest rates, improved technology and sustained higher oil prices made previously unused oil fields economical for drilling. This opened up vast areas of the country for exploration, and sparked a boom in areas such as North Dakota, and completely reversed the decline in US oil production volumes.
This development in US oil production caused a diversion between WTI and Brent Crude between 2011 and 2014, which saw WTI trade over 20 dollars per barrel lower. The massive supply shock of the renewed US oil production cause stockpiles to increase, depressing the price of WTI against other worldwide prices.
XTI/USD opens for trading at 01:00 server time and trades through to roll-over each day.
XBR/USD is a spot commodity pair based on Brent Crude Oil, while Brent technically refers to oil produced in the North Sea it is often referred to as UK Oil. Brent Crude is used as the pricing benchmark for two thirds of the world’s oil production.
Brent Crude has been trading higher than WTI due to the large supply increase in North America and the associated bottleneck in transporting the oil to other areas. However, this has been exacerbated by the decline of North Sea oil production and continuing oil scarcity outside of the US.
XBR/USD opens for trading at 03:00 server time and trades through to roll-over each day.
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