Definition - What does Oil Price mean?
Oil Price refers to the spot price of one barrel of the benchmark crude oil. The price depends upon its grade, location and the content of sulfur present in it. The price of oil can be determined with the help of balance between its demand and supply. Oil storage trade is a strategy in which oil is purchased by the large oil companies when the prices are low for instant storage and delivery. These large oil companies then keep the oil stored till the prices rise.
Petropedia explains Oil Price
Oil Prices play an important role in the global economy. As oil is a global commodity with high demand, there is always a possibility that the large fluctuations in the prices may have a powerful impact on the global economy. The major factors which have direct impact on the Oil Prices are market sentiment, demand and supply. When the supply decreases the demand increases and the price of oil goes up and vise versa. Oil supply depends on tax, legal framework, geological discovery, political situation of the oil producing companies and the cost of extracting the oil. The oil demand depends on the macroeconomic conditions of the globe.