Crude oil is the raw material most actively traded in the market. It consists of a mixture of hydrocarbons found in nature under the earth’s surface. Such as natural gas, crude oil is also a fossil fuel derived from residues of organisms that lived millions of years ago.

This material has considerable variations in appearance and color, which can range from black to yellowish. Crude oil is classified according to the source of origin and its density (light, medium or heavy).

The most common method to extract the crude oil through wells located in fields of oil extraction.

The Organization of Petroleum Exporting Countries (OPEC) is a group of 12 oil-producing countries that meet regularly to establish production quotas and to promote the stability of the oil market. The countries currently members of OPEC are Algeria, Angola, Saudi Arabia, United Arab Emirates, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar and Venezuela. Among the other major oil producers there are Russia, the United States and Norway.

MAIN USES

THE MARKET OF CRUDE OIL

There are two different types of futures contracts on crude oil traded: Brent Crude and West Texas Intermediate. While the West Texas Intermediate was related primarily to the U.S. market, Brent oil futures on the ICE treated (formerly IPE International Petroleum Exchange) are regarded as the international benchmark for the price of oil: they are used to set the price by more than 65 % of oil in the world. Typically, Brent oil futures prices are lower than West Texas Intermediate because of the higher sulphur content of Brent crude.

The factors that affect the price of oil are:

• World demand
• Weather conditions
• Seasonality
• Events geopolitical
• Offer