Factors that Explain Differences in the Prices of Benchmarks Crude Oil

Nowadays, when crude oil has long been the universally recognized main source of energy, this raw material also acquires new functions: now oil is subject of speculation on global markets, acts as a political tool, and sometimes even weapons, divides all countries of the world into exporters and importers. This trend has led to the fact that the price of oil has become one of the main indicators of the world economy, since all countries are to some extent dependent on the price of oil. Prices of almost all traded oil, in turn, depend on two crude oil benchmarks: Brent and WTI, which raises many questions about their price formation. Because in the 21st century, WTI and Brent oil prices started to differ greatly, this study analyzes the impact of various microeconomics, macroeconomic and industry factors that could affect all market fluctuations. Special attention is paid to the statistical analysis of the current situation. The study is devoted to building a model to determine the reasons for the price difference between Brent and WTI in the period from 2007–2017