Essay Crude Oil - 742 Words

CRUDE OIL For the past month and a half I have researched and followed Crude Oil prices in order to gain a better understanding of exactly what this commodity is, how it is traded, how it effects our overall market as well as our everyday lives. During this time I’ve learned the importance of understanding how and why commodities are traded everyday and will share with you exactly what I have learned from my research. In 1859 Colonel Drake stuck oil for the first time and became the first man to create an oil well in which he produced roughly 15 barrels of oil per day. Once word spread of this discovery you saw many men attempt to accomplish the same feat and create oil wells of their own. Some of oil’s first uses were as a lubricant†¦show more content†¦As you can see the United States is the top importer and this is partially responsible for our trade deficit and our attempt to search for not only a more eco-friendly way to fuel automobiles (a large use of ou r oil) but also to limit our import. In taking a look at the contract specifications of trading Crude Oil as a commodity you may notice it is traded on the NYMEX market and there are certain restrictions on the minimum and maximum price fluctuations and the trading terms. These all have a tremendous effect on what the final price is set at each and everyday and are important to learn when studying this commodity. There are several factors that can effect the supply and demand for Crude Oil including OPEC and any rules and regulations they may set for trade, the ever changing inventory of oil as some countries are experiencing depletion and new countries are finding oil. There is also the relationship you hold with the country if you are an importer you must maintain good relations and if you are an exporter the ball is in your court as to how you decide to trade and also OPEC will often get involved if the country is involved. In the past month and a half I have seen oil prices stay relatively stable with some increase in prices during the summer months due to certain factors which may include summer driving months here in the United States all the way to the recent declinesShow MoreRelatedThe Price Of Crude Oil Essay1075 Words   |  5 PagesAbstract The price of crude oil has experienced a sharp decline since June, 2015. The stunning fall in oil prices has been one of the most important global macro-economic developments of the past 20 months. There are numerous factors that have contributed to the oil price crash and the downturn of the oil and gas industry. 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How does this affect the daily lives of the entire population? The preceding questions are the basis for the enclosed report. The primary objective of this report is to give a few reasons as to what causes prices of oil and prices of gas to rise. Among these reasons, speculation of things that may or may not happen, like a terrorist strike, is one of the leading factors. Another reason for the continued rise in prices of oil and gas is the constantRe ad MoreThe Discovery Of Crude Oil And Oil Prices2425 Words   |  10 Pagesdeclined as results of crude oil discovery and subsequent increase in production and exportation of crude oil (Edo (2013). The discovery of crude oil and appreciation of oil price in the World market some years ago leads Nigerian government to abandon all other means of revenue generations including agriculture, just to depend solely on crude oil revenue to finance most of her budgets. 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