Crude oil is a naturally occurring liquid composed mostly of hydrogen and carbon. It is usually found underground but can also be found above ground in oil seeps or tar pits. It is used to produce fuel for cars, trucks, airplanes, boats and trains, asphalt for roads, lubricants, plastics for toys, bottles, food wrap and computers.
Barrels from an area in which the crude oil’s molecular characteristics have been determined and the oil has been classified are used as pricing references throughout the world. Some of the common reference crude oils are:
- West Texas Intermediate (WTI), a very high-quality, sweet, light oil delivered at Cushing, Oklahoma for North American oil.
- Brent Blend, comprising 15 oils from fields in the Brent and Ninian systems in the East Shetland Basin of the North Sea.
- Dubai-Oman, used as benchmark for Middle East sour crude oil flowing to the Asia-Pacific region.
Different types of crude oil futures are traded at the NYMEX, ICE Europe and TOCOM (Japan).