Crude Oil

Crude oil-Major features

The commodity called crude oil , like other commodities is in a market where the price is always in flux depending on the world's supply and Demand, with this constant state of flux one must understand the major features in the market, its history, the factors that

Crude Oil

Crude oil comes in various types and is arguably the world's most important commodity. The market leaves many different variations of the oil but the international benchmark is crude oil, with other prices based on their quality compared to crude oil. This crude oil is called the sweet crude oil, which is low in sulphur content, and usually known as light sweet crude oil. This version yields the most and is internationally refined with buy products of gasoline and jet fuel.

The Players

Oil Producers

There is an oligopoly in the world oil market; just ten companies control 68 percent of the world's proven oil reserves. Nine of the ten biggest oil reserve holders are state owned Oil Companies, while out of the 10 biggest producers 8 of them are state owned aswell. There are many ways of looking at who the major players in the supply of crude oil are, but the stance I have taken is to look at OPEC and non- OPEC countries

Organization of Petroleum Exporting Countries (OPEC):

OPEC's goal since establishment is to stabilize oil prices by adjusting their production levels and influencing the world's oil supply and demand. Consisting now of 11 members namely from the Middle East and Africa. OPEC holds over 75 % of the world's oil reserves and is the biggest player in the market, with all members working together to influence the world's oil supply. The decisions made by OPEC members influence the overall oil market by determining how much of the gap between world demand and non-OPEC supply is filled by their production. Major Non-Opec countries include: Russia, the United States, Mexico, China and Canada

Other oil suppliers are broken up into the following:

• Investor-owned oil companies, including ExxonMobil, Royal Dutch Shell, and BP , are primarily concerned with giving the shareholders the maximum returns

• National oil companies that function as corporate entities, including Petrobras (Brazil) and Statoil (Norway), often balance profit-oriented concerns and a countries needs to develop a tragedy.

• National oil companies that operate as an extension of the government including Saudi Aramco (Saudi Arabia), Pemex (Mexico), and PDVSA (Venezuela), support their government's programs either financially or with a given strategy and supply their domestic users with oil under set world prices.

Oil

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