Crude oil is the raw material that is refined into gasoline, heating oil, jet fuel, propane, petrochemicals, and other products. In today's complex global markets, the price of crude oil is set by movements on the three major international petroleum exchanges the New York Mercantile Exchange, the International Petroleum Exchange in London and the Singapore International Monetary Exchange.
Prices of crude oil have always been politically volatile and are greatly influenced by supply and demand. They behave much as any other commodity with wide price swings in times of shortage or oversupply and in times of political instability. The crude oil price cycle may extend over several years.
There are two types of crude oil, sour crude is primarily the type of crude that comes from OPEC, as opposed to West Texas Intermediate (WTI) or sweet crude. The WTI price is traded on the New York Mercantile Exchange (NYMEX).
Crude oil began futures trading on the NYMEX in 1983 and is the most heavily traded commodity. It trades in units of barrels, and the price is quoted in dollars and cents per barrel.
Crude oil Futures trading has always been of tremendous interest to speculators who hope to profit from the ever changing price of this commodity.