Crude oil, also known as unrefined petroleum, is among the most significant energy sources in the world. This fossil fuel is refined into several petroleum products used on a daily basis such as gasoline, diesel and kerosene. Petroleum liquids are also used to create industrial lubricants, plastics and chemicals.
Every country in the world depends on oil; the major countries to produce it include Saudi Arabia, Russia, United States, Iran and China. The top oil consuming countries are the U.S., China, Japan, Russia and Germany.
Oil accounts for more than one third of the world’s main energy supply. However, several countries are turning away from it and attempt to lean more towards renewable energy. Using solar and wind farms can help in the struggle against pollution and global warming.
Trading Crude Oil
Demand plays a major role in determining Crude Oil price. For example, countries like China and India are highly industrialized, meaning their demand for crude oil increases. On the other hand, the upsurge of electric cars in certain countries decreases the demand for fossil fuels as petrol is no longer required.
A major factor influencing oil prices is OPEC, an organization which aims to control oil supply via their production quotas. When production is decreased, oil values tend to rise and vice versa – when production is increased, barrel values drop.
The U.S. Dollar
Crude oil is priced in U.S. dollars. The greenback therefore has a major influence on this commodity’s price. For instance, when the dollar value drops, oil prices rise and vice versa – when it rises, the value of oil drops.
When there are extreme weather conditions like tornados or hurricanes, oil production takes a hit. Refineries close down, which in turn affects the commodity’s price.
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