Crude Oil Commodity is “Fungible” Commodity

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Crude oil commodity is valuable because it can be refined to produce everyday products such as gasoline, diesel and a multitude of petrochemicals. https://bit.ly/2yqj5mk

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Crude Oil Commodity is “Fungible” Commodity:

Crude Oil Commodity is “Fungible” Commodity

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Crude oil commodity is a naturally occurring, unrefined petroleum product composed of hydrocarbon deposits in natural underground pools or reservoirs and remains liquid at atmospheric pressure and temperature. Although it is often called "black gold," crude oil has a wide ranging viscosity and can vary in color to various shades of black and yellow depending on its hydrocarbon composition. Crude oil can be refined to produce usable products such as gasoline, diesel and various forms of petrochemicals. Even though most crude oil commodity is produced by a relatively small number of companies and often located in remote locations far from the point of consumption, trading in crude oil on a global basis has always been robust. Nearly 80% of international crude oil is transported through waterways in large tankers and most of the rest by inland pipelines

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What Is Crude Oil? Crude oil is unrefined petroleum. Crude oil occurs naturally and is predominantly composed of hydrocarbon deposits. Crude oil is valuable because it can be refined to produce everyday products such as gasoline, diesel and a multitude of petrochemicals. Another reason it is considered valuable is because it’s non-renewable making it a finite resource. Why Is Crude oil commodity So Valuable? Before the Industrial Revolution, agricultural staples like corn and wheat ruled the commodities market. Today, however, crude oil and its derivatives are the most actively traded commodities in the world. That’s not surprising, considering oil touches just about every aspect of the global economy, in terms of consumer goods themselves as well as their production and transportation.

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Oil is a major component in the manufacture of:- Plastics Synthetic textiles, Copper Commodity, (acrylic, nylon, spandex, polyester) Fertilizer Computers Cosmetics Steel In fact, less than half of a 42-gallon barrel of oil actually goes to fuels production; the rest is used to make consumer goods fuel oil commodity. It’s estimated that the average American uses about three gallons of petroleum products per day. Although the market for oil is global, oil trading has clustered around several primary regions. The crude oil in each of these regions has slightly different characteristics, typically referred to in terms of viscosity (light versus heavy) and sulfur content (sweet versus sour). Each of the major trading regions has established benchmarks to track price movements in oil commodities:

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West Texas Intermediate (WTI), which is a light sweet crude oil, with gravity of around 40 on the American Petroleum Institute (API) gravity scale and low sulfur content. Brent Crude is a light sweet crude oil from the North Sea. Its gravity is similar to WTI, but its sulfur content is slightly higher. From an oil investing point of view, it’s closest in quality to WTI. Dubai Crude, also known as Fateh , is denser (heavier) than both WTI and Brent and has a higher sulfur content, making it a sour crude in Europe Commodity. It’s useful in oil trading as a benchmark for oil shipments in the Middle East.

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