The current world events spark an interest in oil prices.
But this isn’t just a single number relating a quantity of a slick substance to some dollar amount.
What exactly do you mean by an “oil price”? Let’s break it down.
Oil in this context means Crude Oil. However, there are several types of crude oil with its corresponding prices. These crude oils are priced according to a benchmark.
Price quoted in the news is usually the front end month futures price of a specific crude oil.
Market participants buy and sell crude according to these futures prices by a differential.
There is no format spot price; spot price is just the price reported by price reporting agencies such as Platts or Argus based on their internally data on actual transactions; transactions that use these price benchmarks plus differential.
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