CRUDE OIL

What is Crude Oil and what are the available types
Crude oil is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. A type of fossil fuel, crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. It is a nonrenewable resource, which means that it can’t be replaced naturally
Crude oil is typically obtained through drilling, where it is usually found alongside other resources, such as natural gas (which is lighter, and therefore sits above the crude oil) and saline water (which is denser, and sinks below). It is then refined and processed into a variety of forms, such as gasoline, kerosene and asphalt, and sold to consumers.
Although it is often called “black gold,” crude oil has ranging viscosity and can vary in color from black and yellow depending on its hydrocarbon composition. Distillation, the process by which oil is heated and separated in different components, is the the first stage in refining.

The Different Types of Oil

West Texas Intermediate (WTI)
This type of oil contains low amounts of sulfur and density. Its sulfur content is only 0.24% and its gravity is 39.6 degrees. The West Texas Intermediate is considered to be both sweet and light crude oil. The refining of this oil is usually done in Gulf regions as well as the United States because it is conveniently situated to oil reserves.
Brent Blend
The term Brent Blend is obtained from the geographical location where this type of oil is extracted from. Brent Blend is termed as sweet oil having 0.37% sulfur and 38.06 degrees in gravity. Brent Blend oil is typically used for making petroleum and gasoline for vehicles.
Dubai Crude
As the name puts it, the Dubai Crude oil comes from Dubai – a massive oil producing country in the world. The Dubai crude has a light density, having 31 degrees gravity and a sulfur content of only 2%.
Russian Export Blend (REBCO)
This type of oil has been the standard for Russian crude oil. This is also a perfect example of sour oil because of its high amount of sulfur. Russian expert blend oil is heavily exported to Italy and Netherlands.

Bonny Light Crude Oil (BLCO)
Bonny Light oil is a high grade of Nigerian crude oil with high API gravity (low specific gravity), produced in the Niger Delta basin and named after the prolific region around the city of Bonny
What drives Trading in Crude Prices Futures and Options
Rising energy sector volatility ensures strong trends that can produce consistent returns for short-term swing trades and long-term timing strategies making crude oil trading offers excellent opportunities to profit in nearly all market conditions.
Crude oil moves through perceptions of supply and demand, affected by worldwide output, as well as global economic prosperity. Professional traders and hedgers dominate the energy futures markets, with industry players taking positions to offset physical exposure while hedge funds speculate on long- and short-term direction. Retail traders and investors exert less influence here.
Retail’s influence rises when crude oil trends sharply, attracting capital from small players who are drawn into these markets by front-page headlines.
Crude oil trades through two primary markets, Western Intermediate and Brent. WTI originates in the U.S. Permian Basin and other local sources while Brent comes from more than a dozen fields in the North Atlantic. These varieties contain different sulfur content and API gravity, with lower WTI levels commonly called light sweet crude oil. Brent has become a better indicator of worldwide pricing in recent years, although WTI in 2017 was more heavily traded in the world futures markets
Pricing between these grades stayed within a narrow band for years, but that came to an end in 2010 when the two markets diverged sharply due to a rapidly changing supply versus demand environment. The rise of U.S. oil production, driven by shale and fracking technology, increased WTI output at the same time Brent drilling underwent a rapid decrease.
U.S. law dating back to the Arab oil embargo in the 1970s has aggravated this division, prohibiting local oil companies from selling their inventory in overseas markets. Those laws are likely to change in coming years, perhaps narrowing the spread between WTI and Brent, but other supply factors could intervene and keep the divergence in place.
WTI crude oil rose after World War II, peaking in the upper $20s and entering a narrow band until the embargo in the 1970s triggered a parabolic rally to $120. It peaked late in the decade and began a tortuous decline, dropping into the teens ahead of the new millennium. Crude oil entered a new and powerful uptrend in 1999, rising to an all-time high at $157.73 in June 2008. It then dropped into a massive trading range between that level and the upper $20s, settling around $55 at the end of 2017.
The NYMEX WTI Light Sweet Crude Oil futures contract (CL) trades in excess of 10 million contracts per month, offering superb liquidity. However, it has a relatively high risk due to the 1,000 barrel contract unit and .01 per barrel minimum price fluctuation. There are dozens of other energy-based products offered through NYMEX, with the vast majority attracting professional speculators but few private traders or investors.