Oil trading is an important financial trading mode. The domestic oil trading market started later than foreign countries, and the system is still being further improved. The forms of oil trading mainly include oil futures trading and oil spot trading.
Because spot trading is superior to futures trading mode in many aspects, oil spot trading is a widely used and concerned trading method in the world, especially in economically developed countries.
The pricing of the international crude oil market is based on the standard oil in the world's major oil-producing areas. For example, on the New York Futures Exchange, crude oil futures are based on "WTI" produced in West Texas, and all crude oils produced or sold in the United States are priced based on light and low sulfur WTI.
Due to the strength of American super crude oil buyers and the influence of New York Futures Exchange itself, crude oil futures trading based on WTI has become the leader in global commodity futures trading volume.
Generally speaking, this kind of crude oil futures has good liquidity and high price transparency, and is one of the three benchmark prices in the world crude oil market. When the public and the media usually talk about how many dollars the oil price has exceeded, it mainly refers to this price. However, more than two-thirds of the world's crude oil trading volume is not based on WTI, but on Brent crude oil in the North Sea, which is also light and low in sulfur.
On June 23rd, 1988, the London International Petroleum Exchange (IPE) launched Brent crude oil futures, including northwest Europe, North Sea, Mediterranean, Africa, Yemen and other countries and regions, all based on this. Because the futures contract meets the needs of the oil industry, it is considered as a "highly flexible tool to avoid risks and transactions" and also ranks among the three major international crude oil prices.
London has thus become one of the three major international crude oil futures trading centers. Brent crude oil futures and spot market constitute Brent crude oil pricing system, covering up to 80% of the global crude oil trading volume. Even though the price of crude oil in new york is becoming more and more important, about 65% of the global crude oil trading volume is based on Brent crude oil in the North Sea.
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