Oman crude oil futures contract essay

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Oman crude oil futures contract essay

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Brent Crude Oil Analysis 1.

Launched by the Dubai Mercantile Exchange (DME) on 1 June , the DME Oman Crude Oil Futures Contract (OQD) is the Asian crude oil pricing initiativeblog.com contract is traded on the CME Group’s electronic platform CME Globex, and . Crude oil futures contract began trading on the NYMEX exchange in and until now, the NYMEX Division light sweet crude oil futures contract is the most liquid and largest in volume (as it comes to physical commodities) platform for oil trading. Since , both gas and oil prices are affected more by the ups and downs in these futures contracts. The price depends on what buyers think the price of gas or oil will be in the future. When traders think gas or oil prices will be high, they bid them up even higher.

Crude Oil Dynamics Crude oil, the most actively traded global commodity, is being traded both on the physical and futures market thus simultaneously mirroring current and expected economic fundamentals conditions.

The largest crude oil markets, both in the physical and financial sense, are in London, New York and Singapore.

BREAKING DOWN 'Crude Oil'

The crude oil market consists of different crude oils which vary in quality, characteristics and market penetration. What is specific about the crude oil market is the high diversity in quality differences in grades and variety among the crudes depending on their place of extraction.

Crude oil has two main characteristics — density and sulphur. The crude oil assa is a chemical evaluation of crude oil done by testing laboratories; it provides hydrocarbon analysis for refiners, oil producers and oil traders. The Brent crude is a combination of crude oils sourced from 15 oil fields in the Brent and Ninian systems with Brent Blend, Forties, Oseberg and Ekofisk crudes being the major ones.

Even though it is priced above WTI, it is not as light as the latter[3].

Oman crude oil futures contract essay

The oil is appropriate for the production of middle distillates, such as kerosene, diesel, and petrol. Its API gravity [4] is The most important ones from this point of view are global crude oil stockpiles, proven and unproven oil reserves especially global strategic petroleum reserves[6]spare production capacity and others[7].

Strategic petroleum reserves SPRreadily available stocks of crude oil, are used as a response in an economically threatening[8] disruption in oil supplies. In the case of private oil companies, stockpiling is done either to profit from selling oil in the future or to maintain access to oil in times of physical shortages.

Another major characteristic, excess production capacity, has tightened with time. It is used to absorb a significant oil disruption.

Even though not officially reported, it is considered that non OPEC countries have minimal to none, while OPEC countries have significant slack capacity. As is the case with Saudi Arabia, due to past and expected investments in expanding their production capacity, the country has a slack capacity of approximately 1.

The physical oil market is solely used for receiving and delivering crude oil. Non-standard, spot contracts are used and the title and risk are transferred at a specific time and venue. Crude oil futures contract began trading on the NYMEX exchange in and until now, the NYMEX Division light sweet crude oil futures contract is the most liquid and largest in volume as it comes to physical commodities platform for oil trading.

Crude Oil Prices - Brent And WTI Oil Price Per Barrel

A typical crude oil futures contract is paid daily, traded on regulated exchanges, has a minimum purchase of 1, U. Counter intuitively, the futures market volumes are much larger than physical trading ones.

Production done by a producer Locating, extracting and transporting crude oil Refining refiner, distiller Crude oil is processed and refined into naphtha, gasoline, heating oil etc.

Distribution and marketing traders, brokers, marketer Moving end products to consumers A massive physical infrastructure maintained by an international financial market supports those processes and connects buyers and sellers worldwide. It is comprises the following physical assets: Down the pipeline from extraction through refinement to distribution and consumption, the crude oil market players can be divided into producers platform, wellheadoil refiners, marketers, brokers, oil traders and consumers which buy and sell physical volumes of crude oil and petroleum products Marketing and Trading of Crude Oil Since the international crude oil market also comprises futures and other financial contracts futures trading distinguishes the following categories of actors: Hedgers Market participants who have a direct interest in physical oil production, consumption or trade purchase crude oil futures to hedge against rising crude oil prices.

Speculators Participants in the futures market who do not want to trade physical oil take risky positions with the intention of profiting from short- or medium-term crude oil price fluctuations.Today's DME Crude Oil Oman futures prices, OQ*0 DME Crude Oil Oman futures, DME Crude Oil Oman commodities, charts and quotes.

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The Cash Contract is listed as the first contract at the top of the page. Data Updates. For pages showing Intraday views, we use the current session's data, with new price data appear on the page as indicated by .

Energy Intelligence Research The International Crude Oil Market Handbook of the Oman crude oil futures contract, the first to be established in the Middle East.

Oman crude oil futures contract essay

Although the full details of the terms and conditions remain confidential, the key elements of the contract have been made public.

For the crude oil futures contract, if an airline company wants to buy a large amount of crude oil at a fixed price in the future, it will currently buy crude oil futures to hedge the risk of fluctuation of oil price.

A. A daily Oman Marker Price is published by the DME for the DME Oman Crude Oil Futures Contract (OQD) at Singapore time ( Dubai Time, CST or CDT), which is the current close of the Singapore cash market.

Launched by the Dubai Mercantile Exchange (DME) on 1 June , the DME Oman Crude Oil Futures Contract (OQD) is the Asian crude oil pricing initiativeblog.com contract is traded on the CME Group’s electronic platform CME Globex, and .

Urals, Brent and WTI Crude oil | Daily updated prices