7 Things You Must Know About the Price of Oil

6. Where oil is sold affects the price of oil

To add to the complexity of oil price, the type of oil is not only a consideration but how much it can be sold for on the market is the next determining factor. Oil can be purchased directly and immediately in what we refer to as a spot market or it can be sold on the futures market. Futures markets simply mean that the oil is sold immediately but delivered at a future date. So in other words the commodity is sold now and delivered later. In America, WTI crude-oil futures are traded through the New York Mercantile Exchange (NYMEX) while European oil futures are sold through the Intercontinental Exchange (ICE). Other crude oil exchanges include the Dubai Mercantile Exchange (DME), Muti Commodity Exchange (MCS), India’s National Commodity and Derivatives Exchange (NCDEX) and the Tokyo Commodity Exchange (TOCOM).

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