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Commodity Markets

Crude Oil

Here in this section, we will discuss Crude oil, which is under the classification of energy.


Crude oil is a mixture of hydrocarbons that exists in a liquid phase in natural underground reservoirs.Oil and gas account for about 60% of the total world's primary energy consumption.


Almost all industries including agriculture are dependent on oil in one way or another. Oil & lubricants, transportation, petrochemicals, pesticides and insecticides, paints, perfumes, etc. are largely and directly affected by the oil prices.


Aviation gasoline, motor gasoline, naphtha, kerosene, jet fuel, distillate fuel oil, residual fuel oil, liquefied petroleum gas, lubricants, paraffin wax, petroleum coke, asphalt and other products are obtained from the processing of crude and other hydrocarbon compounds.


The prices of crude are highly volatile ‒ High oil prices lead to inflation that in turn increases input costs; reduces non-oil demand and lower investment in net oil-importing countries.


Factors Affecting Crude Oil:


1.Periodic Global Demand Forecasts by IAEA, the Energy Agency.

2.The Consumer Confidence Index is the largest consumer of Oil in the world, the U.S

3.Weekly Inventory Levels as reported by the respective watchdog agencies.

4.Geo-Political tensions affecting the main producers of the commodity.

5.Political Instability prevailing in Nigeria, one of the largest producers of Crude Oil.

6.Price of Dollar which directly affects the purchasing power of the world.



Crude Oil Price Movement:

Top Crude Oil Consumers:



Trading & Conversion:

  • Crude oil began futures trading on the NYMEX in 1983 and is the most heavily traded commodity.
  • Crude Oil Futures trade in units of 1,000 U.S. barrels (42,000 gallons).
  • Crude Oil Futures are quoted in dollars and cents per barrel.
  • Minimum Price Fluctuation: $0.01 (1¢) per barrel ($10 per contract but in options no price limit.
  • TThere is strict grading and inspection of the crude oil and delivery is done through pipelines pre-determined by the buyer, seller and exchange.
  • Unit in which WTI Crude is quoted: USD / barrels.
  • Conversion Calculation: Nymex Crude price * INR Currency.
  • Example: Nymex Crude future stands at 58.54 and INR Currency is at 49.6075, the price for 1 barrel 
    = ₹58.54 * 49.6075
    = ₹2904.02/barrel

Crude Oil trades on the MCX platform. 


The timing of the exchange is Monday to Friday: 09:00 A.M. to 11:30 P.M.

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