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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael Thompson,

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Speaker 1: and good afternoon, Sean Aylmer.

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Speaker 2: Good afternoon, Michael.

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Speaker 3: Now Sean.

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Speaker 1: Today's question comes from Jonathan and he shared it via LinkedIn,

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Speaker 1: and there's.

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Speaker 3: A look, there's a little bit of context to this one.

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Speaker 1: It did come about because we were talking about oil

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Speaker 1: and we were talking about Brent crude on Fear.

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Speaker 3: And Greed and I.

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Speaker 1: Volunteered a bit of my own research, which doesn't happen

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Speaker 1: very often, does it. And I told you where brent

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Speaker 1: crude got its name from. And you said, look, there

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Speaker 1: are plenty of other types of oil and plenty of

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Speaker 1: other names out there, and maybe we should do it

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Speaker 1: on Ask Fear and Greed, but only only if the

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Speaker 1: request came from outside the Fear and Greed team. And

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Speaker 1: of course Jonathan stepped up to the challenge and he

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Speaker 1: sent this question in through LinkedIn. He goes, Hi, I'm

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Speaker 1: aware of West Texas intermediate oil and Brent crude oil,

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Speaker 1: but I was wondering is that it or are there

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Speaker 1: loads of other oil variants with many other names that

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Speaker 1: for some reason we just don't care to remember or

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Speaker 1: cared to mention over to you. Jonathan understood the assignment here,

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Speaker 1: he did. He's given you some homework.

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Speaker 2: Well, to be honest, it's kind of like a little

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Speaker 2: embarrassing this because there are some really obvious other types

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Speaker 2: of oil which I didn't think about, and they are

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Speaker 2: actually comparable to West Texas Intermediate and Brent. And these

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Speaker 2: are all the vegetable oils. I think, olive oil, canola, peanut, avocado,

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Speaker 2: safer palm.

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Speaker 3: I see, I don't.

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Speaker 2: I don't consider it Like if no, I didn't, I'm

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Speaker 2: with you.

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Speaker 3: If you can't put it in your car, you don't

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Speaker 3: kind of think of it, dude.

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Speaker 2: But the point is that some of these vegetable oils

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Speaker 2: are being used as these biofuels are being used to

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Speaker 2: power transport.

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Speaker 3: Yeah, great point.

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Speaker 2: So however, how having said that, let's just bring it

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Speaker 2: back to something that you think might be able to

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Speaker 2: power your car. So we'll leave all those oils aside.

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Speaker 2: So we have Brent, we have West Texas Intermediate, we

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Speaker 2: have PLATS. Do buy crude, it's called plats. We have

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Speaker 2: the OPEQ reference basket. We have Shanghai Shanghai crude tapis,

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Speaker 2: crude tapis you've probably heard of.

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Speaker 3: Have eaten tapis?

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Speaker 2: You don't need it? It's crude, Yeah, urals oil and

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Speaker 2: Bonnie light. So it's that seven different types of oil. Actually,

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Speaker 2: if you include Brent, it's eight different types of oil.

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Speaker 3: Can I ask her they are they?

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Speaker 1: Actually I'm probably preempty what you're about to tell me

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Speaker 1: right now, But are these actually different types of oil?

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Speaker 1: Or are they different kind of benchmark, like different kind

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Speaker 1: of pricing structures, or are they actually a different variety

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Speaker 1: of oil if you were to put them in a

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Speaker 1: glass jar side by side.

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Speaker 2: Yeah, you've sort of answered your question. Basically, is where

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Speaker 2: they come from?

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Speaker 3: Okay?

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Speaker 2: Or where they're sold? That's broadly the answer, gotcha. So

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Speaker 2: oil is actually one of the most critical commodities in

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Speaker 2: the world. You know, it's used in transport, manufacturing, power generation.

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Speaker 3: Pretty much.

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Speaker 2: Oil prices impact all of our lives, you know, in

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Speaker 2: some way. Brent crude is definitely the main benchmark, but

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Speaker 2: they've got all those others West Texas plats, Shanghai crude, tapers,

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Speaker 2: et cetera. Now we're talking about a big market. It's

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Speaker 2: basically about two point seven trillion US dollars about two

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Speaker 2: thirds of oil contracts is Brent. That's why we talk

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Speaker 2: about it so much. And Brent is based on the

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Speaker 2: oil extracted from oil and gas fields in the North

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Speaker 2: Sea in northwest Europe. Now as an oil, it's considered

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Speaker 2: lower density, lower sulfur content. In fact, they talk about

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Speaker 2: it as being sweet and light. So it's uses.

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Speaker 3: Actually sounds quite tasty.

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Speaker 2: It does. It's uses tapers, it's uses for transport may

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Speaker 2: be better than some of the others, for example, So

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Speaker 2: there is a difference between the oils, but it does

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Speaker 2: come that very much depends where it comes from. Now,

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Speaker 2: you you told us an interesting little bit of trivia

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Speaker 2: that brent crude was originally named by the Shell UK

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Speaker 2: company and they used to name different types of oil

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Speaker 2: by geese. You said, and there's a Brent goose, and

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Speaker 2: that's actually where it came from. But it's also what

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Speaker 2: they call a backronym. That you like, this backronym?

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Speaker 3: What what the heck is a backronym?

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Speaker 2: Well, I presume it's. Well, you can google what backronym is. Well,

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Speaker 2: I just keep gay. But basically, the different layers of

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Speaker 2: an oil field start with a B and R and

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Speaker 2: E and N and and t. So it's broom rannick e, time,

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Speaker 2: eve et I v ness and tarbear and you put

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Speaker 2: those together that it comes up with Brent. So I

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Speaker 2: think that's like being backfilled to suit the Brent goose.

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Speaker 2: That's my theory.

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Speaker 1: Well, a backronym is an acronym deliberately formed from a

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Speaker 1: phrase whose initial letters spell out a particular.

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Speaker 3: Word or words.

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Speaker 1: Yeah, so it is like a backwards a back acronym,

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Speaker 1: like produced the other way around.

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Speaker 2: Okay, yeah, yeah, so not only you know about oil,

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Speaker 2: we're finding about backronyms anyway. The other thing about brand

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Speaker 2: it's waterborne, right, so you get it from the ocean.

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Speaker 2: The oil fields in aaces lower the cost of transport.

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Speaker 2: West Texas is the other big one. It's land locked

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Speaker 2: like it's in West Texas. So the actual supplier that

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Speaker 2: depends on pipeline capacity. That's much harder. Because Brent cred

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Speaker 2: is easy to transport. Brent crud of course can be

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Speaker 2: refined into petrol, diesel, jet fuel, other fuels more easily

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Speaker 2: and affordable because it's high quality. All because it's got

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Speaker 2: less sulfur, it's actually easier to make into petrol and

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Speaker 2: diesel and things like that.

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Speaker 3: Because it's sweet and light.

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Speaker 2: Because it's sweet and light, Michael, that is exactly right.

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Speaker 3: I was listening.

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Speaker 2: It's also used in stuff like cell phones and laptops,

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Speaker 2: c D lipstick, aspirin, plastics, adhesives, solvents. There you go,

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Speaker 2: not going on.

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Speaker 3: So the waterborne element, that makes a lot of sense.

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Speaker 2: Yeah, Yeah, you get it out of the you just

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Speaker 2: like you drill it, put on a boat and take

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Speaker 2: it to wherever you want. You don't have to shift

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Speaker 2: it through pipelines.

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Speaker 3: Ah, goodness, May I've learned some stuff today.

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Speaker 2: Oh, this is a fascinator. I'm very appreciative of the question.

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Speaker 2: Would never have thought of it myself.

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Speaker 1: Maybe maybe we should ask listeners to ask us specific

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Speaker 1: questions again in the future, based on the things that

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Speaker 1: we want to learn more about.

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Speaker 2: Yeah, but that sulfur content is really I mean, I

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Speaker 2: think probably the defining factor, apart from location and how

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Speaker 2: it's priced. The actual why people like well, why it's

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Speaker 2: in such high demand is that sulfur factor.

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Speaker 1: Well, Jonathan JK, JK, thank you for the question.

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Speaker 3: You know what I did, God, I've done Sean.

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Speaker 1: I am in exchange for JK asking us this question

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Speaker 1: via LinkedIn. I have arranged for him to receive a

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Speaker 1: MEA Mug, one of our limited edition Hyper exclusive mug

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Speaker 1: Hyper that are reserved for the most enthusiastic advocates of

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Speaker 1: Fear and Greed. And he got that because he responded

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Speaker 1: to this challenge put out on the podcast within an

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Speaker 1: hour and I just thought that was worthy of a

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Speaker 1: MEA Mug. Absolutely, he has done a good job. JK

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Speaker 1: has done a fantastic job. And of you, Sean, thank you.

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Speaker 2: Thank you, Michael.

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Speaker 3: It's very generous of you. That's what I'm here for.

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Speaker 1: Remember, if you've got something that you'd like to know,

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Speaker 1: then send through your question on LinkedIn, on Instagram, on

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Speaker 1: Facebook or at Fearangreed dot com dot au. I'm Michael

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Speaker 1: Thompson and this is ask Fear and Greed