lower offshore activity levels and increased competition among suppliers. Capital and exploratory expenditures and operating expenses could also be affected by damage to production facilities caused by severe weather or civil unrest, delays in construction, or other factors.

The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil and U.S. Henry Hub natural gas. The Brent price averaged $54 per barrel for the full-year 2017, compared to $44 in 2016. As of mid-February 2018, the Brent price was $62 per barrel. The majority of the company’s equity crude production is priced based on the Brent benchmark. Crude oil prices were better supported in 2017 amid firming demand, rising geopolitical tensions, and ongoing output reductions by OPEC and certain non-OPEC producers. However, upside was limited as rebounding U.S. and other non-OPEC production resulted in ongoing oversupplied conditions. Prices weakened gradually over the first half of 2017 due to concerns that OPEC cuts would be allowed to expire in June 2017, but firmed over the second half of 2017 after OPEC’s decision on May 25, 2017, to extend cuts through the first quarter of 2018. Price support was reinforced on November 30, 2017, when OPEC and their non-OPEC partners agreed to further extend output cuts through December 2018.

The WTI price averaged $51 per barrel for the full-year 2017, compared to $43 in 2016. As of mid-February 2018, the WTI price was $59 per barrel. WTI traded at a discount to Brent throughout 2017. After starting 2017 at a $2 discount to Brent, the WTI discount expanded to about $6 by year-end due to rising U.S. crude production, rebounding inventories, and growing concerns that pipeline infrastructure constraints would again restrict flows to export outlets on the Gulf Coast.

A differential in crude oil prices exists between high-gravity, low-sulfur crudes and low-gravity, high-sulfur crudes. The amount of the differential in any period is associated with the relative supply/demand balances for each crude type. In second-half 2017, the differential held generally steady in North America as robust refinery demand supported heavy crude values, while light sweet crude prices in the U.S. were supported by rising exports of domestic production. Outside of North America, differentials were steady to modestly wider amid well-supplied light sweet crude markets in the Atlantic Basin, while rising U.S. exports to Asia increased competitive pressure on Middle East exports to the region. Chevron has producing interests in heavy crude oil in California, Indonesia, the Partitioned Zone between Saudi Arabia and Kuwait, Venezuela and in certain fields in Angola, China and the United Kingdom sector of the North Sea. (See page 39 for the company’s average U.S. and international crude oil realizations.)

In contrast to price movements in the global market for crude oil, price changes for natural gas in many regional markets are more closely aligned with supply-and-demand conditions in those markets. Fluctuations in the price of natural gas in the United States are closely associated with customer demand relative to the