Crude Oil Futures Market Facts

Unrefined oil, or, crude oil is the most-traded physical commodity and has two main trading types being traded as futures; Light Sweet Crude traded on NYMEX and Brent Crude in the UK (foregoing Dubai).

Many industries rely on crude oil for the production of jet fuel, gasoline and diesel (transportation and the movement of goods and services) and for heating oil.

As an industrial energy - crude oil supplies, reserves and future exploration efforts are inherently linked with and enable large scale economic growth. Not only for energy but for its use in manufacturing for everyday products such as many fertilizers, solvents, pesticides and plastics. Along with hydrocarbon based lubricants and asphalt.

Consumption levels are highest from the United States, China, Japan and Russia.

The main producing oil nations (per 2007) are Saudi Arabia*, Russia, the United States, Iran*.

With supplies showing signs of starting to dwindle, and with world market needs ever increasing, in the background looms the question of peak oil. So exploration techniques and maintaining reliable supply lines play an important role as well.

Traditionally, reservoirs of the crude form underground when hydrocarbons become trapped between rock layers. Normally, this occurs in a characteristic pattern that is settled between a level of lower water and another of natural gas having risen above.

With the importance of supply, however, efforts have begun focusing on; efforts to extract the oil from tar sands, within shale regions and article regions where prior efforts may not have proved economical, and on; deposit containing regions that were not drilled largely for controversial environmental reasons such as offshore drilling, for example.

A shift in consumptive efforts in the form biofuel, hydrogen, wind and solar cell power, may provide alternate energy sources as may the hybrid and hydrogen or electric vehicle.

NYMEX is the largest trading exchange for crude oil futures contracts. International Petroleum Exchange in the United Kingdom (changed to ICE).


* OPEC countries