The global economy runs on the supply of oil. Now, the economics of oil prices is simple. Can you imagine driving your car with these prices of oil? With the end of recession, crude oil prices will again reach in the range of $150-$200 per barrel.
You can trade crude oil by investing in oil companies. You can trade oil stocks, oil ETFs, oil mutual funds but the best method to trade crude oil is to trade crude oil futures. Crude Oil Futures contracts get traded on the New York Mercantile Exchange (NYMEX).
Gasoline is the main product made from the processing of crude oil. So whenever the price of a barrel of crude oil increases, an increase in the price of gasoline will soon follow.
Who is the number one producer of crude oil?
The organization currently produces roughly 45 percent of the world's crude oil. The entire world consumes nearly 82 million barrels of crude oil per day. How has crude oil raised the price of gasoline?
The price for a barrel of crude oil has skyrocketed more than 300 percent over the last five years. Crude Oil - The Different Benchmarks For Traders And Investors
The two main crude oils which are either traded themselves or whose prices are reflected in other types of crude oil are West Texas Intermediate and Brent.
WTI is a light crude and with an API gravity of 39.6 degrees it is lighter than Brent Crude. Although the production of WTI crude oil is on the decline, it still is the major benchmark of crude oil in the Americas. Our analysis of crude oil at Blue Index uses WTI as the benchmark for US crude prices.
Brent
Brent, or actually Brent Blend, is a combination of crude oil from 15 different oil fields in the Brent and Ninian systems in the North Sea. NYMEX Futures
The NYMEX (New York Mercantile Exchange) futures price for crude oil, which is another major benchmark, represents on a per barrel basis the market value of a futures contract to either buy or sell 1,000 barrels of WTI or some other light, sweet crude oil at a specified time.
Although most NYMEX crude oil contracts are never executed for physical delivery, the NYMEX market supplies important price information to US buyers and sellers of crude oil in the US and around the world, making WTI the benchmark for many different crude oils, especially in the Americas.
For more detailed crude oil pricing, OPEC collects pricing data on a basket of seven crude oils, including: Algeria's Saharan Blend, Indonesia's Minas, Nigeria's Bonny Light, Saudi Arabia's Arab Light, Dubai's Fateh, Venezuela's Tia Juana Light, and Mexico's Isthmus (a non-OPEC crude oil).
OPEC uses the price of this basket to monitor world oil market conditions. Because WTI crude oil is a very light, sweet crude, it is generally more expensive than the OPEC basket, which is an average of light sweet crude oils such as Algeria's Saharan Blend and heavier sour crude oils, such as Dubai's Fateh. The US imports more types of crude oil than anywhere else and it is thought this may represent the truest world oil price among all published crude oil prices.