Crude Oil Overview Video
Crude oil is produced all over the world. Some fields large some are small, some are high sulphur, some are low sulphur; some are very light, some are very heavy. But they all end up in a refinery.
There they get changed into the products that you use every day: gasoline which you drive your car with, the heating oil that you heat your house with. And the other stuff, like heavy fuel oil which basically we put out in the ships of the world and they burn it out at sea because we don’t like the sulphurous fumes they create.
How is crude oil traded? Physical cargoes trade every day. Producers sell them, refiners buy them.
But there is another side to the market, the international exchanges. Speculators trade these every day like they do the stock market.
Supply and demand doesn’t have everything to do with the price of oil. The strength of the US dollar does. Economic data out of the powerhouse economies of China and the US drives the world as well.
And there’s all sorts of other various geopolitical factors that can turn the price of oil upside down within 10 minutes during a day.
The price of oil on the international markets swings by dollars it can rise $2 in 10 minutes and give it all back in the next. Speculation, that’s trading.