A water cut meter includes a test cell through which a petroleum stream will flow. The test cell includes an outer shell, a sensor probe which cooperates with the outer shell to form a sensor capacitor with the flow of the petroleum stream as the dielectric and a reference probe surrounded with pure oil as the dielectric to form a reference capacitor. Processing apparatus includes a comparator network electrically connected to the sensor capacitor and to reference capacitor which compares the capacitance of the sensor capacitor with the capacitance of the reference capacitor. The comparator network provides a signal corresponding to the capacitance difference between the sensor and reference capacitors. An output circuit connected to the comparator network provides an output corresponding to the water cut of the petroleum stream in accordance with the signal from the comparator network.