7 Things You Must Know About the Price of Oil

5. Types of oil affect the price of oil

The way we talk about oil, you would think that there’s one or two types of oil. But just like any other natural commodity, oil takes many shapes and forms. There are 161 different types of oil and each one has its own consistency, chemical breakdown and potential for use in the market.

The price of oil therefore is also dictated by the type of oil being produced and its worth in the market at the time. For example the most common type of oil found in America is called West Texas Intermediate (WTI). West Texas is high on the list of oil finds because it is a “light and sweet” oil, which is easy to break down and refine making it a more cost effective oil to produce and sell. Only because WTI is readily available and lucrative, is it used as an industry standard above the other 160 types of oil that we have in the market.

There are many types of oil that have risen to become a standard, such as the European Brent Blend found in The North Sea, and the OPEC basket, which combines the prices of several other popular types of oil from around the world into a “price basket” of OPEC cartel contributors.

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