Crude Oil Commodity Research and Analysis

Crude Oil Commodity Research and Analysis

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HOLD

General Information

Substitute Commodities:
Ethanol Commodity Research and Analysis
Solar Power Commodity Research and Analysis

Locations of Abundance:
South Arabia
Venezuela

Commodity Trade

Major Importing Countries:
USA
Japan
China

Major Exporting Countries:
South Arabia
Nigeria
Iran
Russia
Venezuela

Investment Potential

Market / Industry Affects
Energy
Transportation
Retail Shopping

Investment Vehicles
NYMEX WTI Futures & Options
ICE Brent Crude Futures & Options
NYMEX RBOB Gasoline Futures & Options
NYMEX Heating Oil Gasoline Futures & Options

Multi-Media

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Commodity Investment Survey

Difficult to Expand Short Term Supply?

Not Sensitive to Price Changes?

Lack Good Substitute Commodity?

Crude Oil Conclusion - When Crude Oil Commodity Research and Analysis prices increase, consumers can not reduce their demand easily; therefore, Crude Oil prices will remain elevated. When Crude Oil prices increase, consumers can not easily switch to using other commodities; therefore, prices will remain elevated.

SWOT Statistics crude-oil SWOT Analysis

Strengths + Opportunities = 8

Threats + Weaknesses = 5

Be the first to write a conclusion

Crude Oil Description Update

Crude oil which is also known as petroleum is a flammable liquid that is naturally occurring. In other words, it is a fossil fuel. It is a complex mixture of hydrocarbons. Crude oil is an important commodity, used in many countries for various purposes. The most common use of crude oil is gasoline. The oil is refined and separated, which is done most often by boiling. Different compounds in the crude oil reach boiling point at different levels, making separation of the compounds an easy task. Heavy crude oil is widely available but is not ideal for refinement, taking longer to process and having more waste product. Light crude oil is the best type to use for refining and is most readily found in Arabic countries. Crude Oil is useless as a raw compound. Once refined however it can be transformed into highly valuable fuels powering aircraft, shipping, rail transport, trucking transport, power generation, and further refined into many different petrochemicals and feedstock materials for polymers, resins and fertilisers.

What Increases the Price of Crude Oil? Supply Chain Disruptions are a major factor in pricing physical and financial crude markets. For example West Texas Intermediate Light, Sweet Crude delivered to Cushing Oklahoma is the benchmark pricing point for US Crude Oil. Any uncertainty or issues arising within the supply chain points of drilling and transportation, such as significant Gulf Hurricane activity or pipeline & barge disruptions may threaten supply and hence put pressure on the price of Crude Oil to rise as traders and refiners scramble to meet crude quotas.

  • Politics Limits Supplies Every nation has resources. Political systems contrive shortages, by making some resources more difficult to access. Governments (see OPEC cartel) create artificial shortages. Even rare elements like...
  • Resource is Limited When resources are limited, they are impossible to replace. If demand for a resource stays the same, then a decreasing supply will increase the price of the resource. This happens whenever OPEC, an...

What Decreases the Price of Crude Oil? Oversupply of Crude will lead to buyers enjoying market power and show lower bids for physicals and financials, with less incentive to hold crude inventory with certainty of heavy supply and producers willing to be price-takers. Crude Oil physical and financial markets are also highly linked with regards to price discovery. This has encouraged many different participants to get involved in the market with no underlying role in meeting physical production and consumption of the actual commodity. These participants are typically involved by forming an opinion on whether the commodity is over valued or undervalued, and then position in the physicals or futures by going long or short to express that view. This class of investor, such as banks, hedge funds and proprietary trading desks speculates on the price direction, arguably adding liquidity to the market however can also be responsible for overly exaggerated price moves with respect to value and underlying physical liquidity, hence often seeing price collapses when market activity and volume has overshot fundamentals.

  • Emits Carbon Carbon emitting products and industries are blamed for global warming. If global warming has a cost on the planet, then that cost should be attributed to the ones creating the problem. Increasing cost...

Trading / Investing Strategy for Crude Oil? Update

Buy futures to go long, sell futures to go short, buy and sell calls and puts for directional and volatility expressions, Inter-temporal spreads as one method of relative value implementation, Inter-product spreads (trading the crack spread)

Bullish Case for Crude Oil?

Bearish Case for Crude Oil?


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