Crude market oil price stock
The crude oil prices are usually referred to the spot price of either the WTI or the light crude. The spot price is the mechanics, where the prices are not predetermined. The prices are settled on the spot, with reference to the payment and delivery of the commodity. The settlement of the price is normally transacted in a day or two, of finalizing the contract. WTI denotes the West Texas Intermediate, and also known as Texas Light Sweet.
It is used as a benchmark for determining the oil prices in the New York Mercantile Exchange. This type of oil is also normally referred as the North American. Light crude oil is a type of oil, which has low level of wax contents. The differentiation in the heavy oil and light oil is more related to the practicality than explaining theoretically. It can only be said that the heavy oil are more wax contents, as compared to the light oil.
The oils prices are determined after evaluating the factors related to the oil. The two factors related to oil are API gravity and the sulphur content in the oil. The API gravity stand for American Petroleum Institute gravity. It is a measure to whether the oil is heavy or light petroleum. It is measured over the water, as if the oil floats over the water, it is called to be light petroleum with the gravity of more than 10. And, if the gravity is less than 10, it is termed as heavy petroleum and it sinks in the water.
The oil prices are determined and traded in the New York Mercantile Exchange (NYMEX) and International Petroleum Exchange or Intercontinental Exchange (ICE). The price of the oil is calculated over the barrel calculation. One U.S. barrel is equal to 159 liters. The majority of types of the oil can not be traded through any exchange. The exchange is done through the over the counter basis, which is typically done through the reference to the marker crude oil grade. Over the exchange counters trading is the term used for the exchange of the financial instrument or the commodity, directly between the two concerned parties.
Future estimation of the crude oil prices
The International Energy Agency have expressed that the prices of the crude oil would be high in the coming future. The opinion was published in the month of Oct. 2007. The reason for the increase in the prices of the crude oil is expressed to be the phenomenon growth in the economy of the China and India. In addition, the rise in the price is also associated with the global peak of oil production that had occurred in the year 2006. The peak oil is the point or the time frame, at which the production of the oil is increased to such a level, that it can not be increased above that. The peak oil can also be termed as maximum petroleum production rate, after which the rate of production enters in its terminal decline. The peak oil levels is the level after which if the market demand higher level of production of the oil, the prices are supposed to rise and the production is expressed to be declining.
Other Articles
