Crude Oil Prices
According to NYMEX Rulebook "crude oil" means a mixture of hydrocarbons that exists in a liquid phase in natural underground reservoirs and remains liquid at atmospheric pressure after passing through surface separating facilities. Crude oil refers to the direct liquid hydrocarbon production from oil wells, or a blend of such, in its natural form, not having been enhanced or altered in any manner or by any process that would result in misrepresentation of its true value for adaptability to refining as whole crude petroleum. For the purpose of NYMEX crude contracts, condensates are excluded from the definition of crude petroleum.
Crude oil is the most traded commodity in the world. As crude oil is pumped from various parts of the world, it comes in many varieties and qualities, depending on its specific gravity and sulphur content. This leads to many price points, hence buyers and sellers have found it easier to refer to a limited number of reference, or benchmarks for crude oils.
A benchmark crude or marker crude is a crude oil that serves as a reference price for buyers and sellers of crude oil. There are three primary benchmarks, West Texas Intermediate (WTI), Brent Blend, and Dubai Crude. Other well-known blends include the OPEC Reference Basket used by OPEC, Tapis Crude which is traded in Singapore, Bonny Light used in Nigeria, Urals oil used in Russia and Mexico's Isthmus. Indian Basket Crude is weighted average of Dubai and Oman (sour) and the Brent Crude (sweet) crude oil prices. It is used as an indicator of the price of crude imports in India.
Oil futures were originally created to give heating oil dealers, gas retailers, aviation companies and other businesses a method of hedging against adverse price changes. Instead, they've become just another Wall Street plaything.
~ Gary Weiss