Archive for the ‘Oil Commodity Market’ Category
The oil commodity market is each a wholesale and also shopping market. The phase commodity is a general term for natural resources found in the business for the manufacturing of completed or semi-finished items, both since components or perhaps because energy entering a cycle of manufacturing or perhaps delivery of this product.
Typically, commodity trading in petroleum painting products had been a destination in which solely the elite, extremely traders dared to venture. With barrels supporting 42 gallons each as well as a contract minimal of 1,000 barrels, delivering grease had been a task ideal kept to the providers. However, the petroleum trading land has undergone some dramatic changes around current many years.
For decades grease prices were consistent, then in the middle 1970s the business exploded. Technical advances and the political landscape contributed to the doubt, insufficient stability, shortages and also increasing price ranges. Nearly 30 working years later, rates have skyrocketed to even more than $70 per barrel and the forecasters anticipate that in mid to belated 2007 when it is expected to experience a slight decrease in the next not one but two many years.
However, indeed there tend to be no certainties regarding oil rates, however there are always a few big measure factors that can reduce the chance of supplying a moderately valid projection. Read more
There are many grades of crude oil extracted from various geographical locations across the world; each type has a different value in the oil market. The type of oil makes a difference to the process used to refine the product, the amount of pollution caused by it and the properties of the final product. If you want to know more about the classification system of the oil market, Your Personal Financial Adviser is here to help.
Common forms of distinction are as Light and Heavy as per the density, which is measured by and inversely proportional to API (American Petroleum Institute) gravity. A liquid having an API greater than 10 indicates that it will float over water. Light crude oils have an API above 31.1, with the top crude oils showing a range of 40 to 45. The API of medium oils lie between 22.3 and 31.1 while anything below an API of 22.3 is called a heavy crude oil. Lighter oils will yield higher levels of gasoline, aviation fuel and heating oil. Read more
The booming oil market is based on petroleum and this asset is extracted from the ground. It is a limited commodity and the current oil wells are gradually facing a depletion of the black gold. Tracing the history of oil production, the largest discoveries were made almost 50 decades ago, with nothing comparable in recent years. Summing it up, for every new barrel of oil discovered, 6 other barrels of oil are being extracted and consumed.
So how does this scenario affect the oil market? Your Personal Financial Adviser has the answer. People have already started becoming conscious of this stark reality and are now starting to employ more environment-friendly sources of energy, such as solar energy or natural gas. Before oil was discovered and made so popular, the world was surviving on coal and its by-products, so one school of thought believes that a new satisfactory replacement for oil and its products will come along in due course of time. Read more
Oil commodity traders place bids on contracts for oil futures, which are legally bound agreements to either buy or sell in the oil market at a pre-determined date in the future, at a pre-determined price. They can be traded on the commodity exchange. The common duration for trading in futures in the oil market is three months ahead, though even longer durations have been used.
These traders are of two categories. The first set represent companies that consume oil; for example, aviation or automobile companies. They usually place buy contracts, so that they can plan in advance for the payment of the oil delivered. The other kind of traders in the oil market are normal investors who simply guess what changes will take place in the price of oil in the near future. They base their judgment on recent news in the oil industry and international political events, especially in countries that are major oil producers.
A host of factors affect the bid prices of contracts in the oil market. The current output of crude oil is the most important. If there is any upcoming event that could affect the levels of production, the majority of the bids are at higher prices. Oil is usually kept in reserves as well, for backup when demand increases or supply decreases. If there is indication that these reserves will be tapped into, the price of bids goes down. Read more
investors are looking at different sectors like the oil market, which is booming. New investors in this field is often confused with the various terminology used by trading experts, brokers and investors on trading forums. There is no need to worry; Your Personal Financial Adviser is here to simplify the glossary used in the oil market.
Let us start with the units of measurement. 1 gallon of crude oil converts to 0.57 gallons of refined oil on an average. A standard ‘barrel of oil’ contains 42 gallons or 159 liters and is commonly referred to by the abbreviation BBL. The daily consumption of oil is measured in BBL/d which is ‘barrels per day’. Another related term is BOE, which stands for Barrel of Oil Equivalent; this is the unit of energy obtained when 1 BBL is burnt. This term BOE often appears in financial statements of companies in the oil market, reflecting a common measure for their reserves and production.
Just as precious metals are mined, oil is drilled from the earth. This process is carried out on rigs, which can be situated on land, but more commonly as an offshore rig in the middle of the deep sea. The better rigs use high technology tools to extract more crude oil. From these rigs, oil is transported in two ways – cheaper tankers for international coverage and more expensive pipelines for intra-continental transportation. Read more
Crude oil, also referred to as ‘black gold’ sometimes, is the raw form of petrol, diesel or kerosene that are used by consumers all over the world. It is a commodity that has the same properties, irrespective of the country in which it is mined. The demand and supply of oil has a lot of variations, impacting its price accordingly, and making the oil market an interesting venture for traders.
Your Personal Financial Adviser will explain everything about the oil market, who are the major players, why the prices of oil keep fluctuating and what determines its price in the consumer forms. Let us start with the basics of a barrel of oil. Economic demand and supply also drives the prices of the oil market, but there are several other impacting factors as well. These are government regulatory laws, taxes levied and initiatives like go-green which encourages a mass move towards solar fuels. The latter is very important since crude oil is a non-renewable resource obtained from fossilized humans and animals buried deep inside the earth millions of years ago. At the current rate of worldwide consumption of the various forms of refined crude oil; this resource will be soon depleted. Read more