The market value of a specific grade of crude oil is established by two main factors:
- A. Density – which is calculated in (API)
- B. Sulphur Content – representative of how light and sweet or sour the crude oil is.
1. West Texas Intermediate
West Texas Intermediate is one of the largest traded commodities in the world; a high-quality crude oil explored and physically traded in the U.S. Its API gravity is approximately 39 API and has 0.24% sulphur content. The New York Mercantile Exchange (NYMEX) is the primary exchange aids futures trade in this light sweet crude oil.
2. Brent Crude Oil
Crude oil from the North Sea, UK, Brent is a pricing benchmark for crude from Europe and Africa. With an API O gravity of 38 API and 0.4% or less of sulphur content by weight, Brent crude oil is the second most traded variety of crude in the world.
3. Middle East Crude Oil
It is normally taken as the arithmetic average of Oman and Dubai crude grades. An API gravity between 31 API and 37 API and 2.05% or less of sulphur content by weight makes Middle East Crude Oil a heavy and sour crude oil. It is an assortment with a very large physical market in the Gulf region. Most of the Indian refineries use crude benchmarked against Middle East Sour Crude Oil. TOCOM is a prominent futures trading platform that offers trading in this grade of crude oil.
PRICE MOVING FACTORS
Weather conditions increased demand from emerging and developing countries geopolitics
Speculative buying and selling
OPEC output, supply, and spare capacities
Changes in the refining sector; for example, a drop in the refinery utilization rate
US crude and product inventories data a drop in the refinery utilization rate
Crude Oil research
Crude oil Market Outlook with technical chart updated prior to the market opening hours every day.
MEASUREMENT (AVERAGE GRAVITY)
1 US barrel = 42 US gallons
1 US barrel = 158.98
liters 1 MT = 7.33 barrels
Note: The measurement of barrels per metric tonne (MT) varies from origin to origin.
Mcx Crude oil contract specification details are as follows:
Price Quote – Per barrel
Lot size – 100 barrels
Tick Size – Rs.1/-
P&L per tick – Rs.100/-
Expiry -19/20of every month
Delivery units – 50,000 barrels
Physical Delivery – Mumbai / JNPT Port
Snapshot of Crude oil market depth
Crude Oil contract expiring on 19April 2018 is trading at Rs.4232/- per barrel.
Lot size X price quote=100 X4232=423200 /-
Span Margin calculated
The margins on Crude oil is roughly calculated 5% of Exchange Span required to trade this contracts at = 21,160/
Prices movement Rs =100/- Per lot.
Intraday trade using MIS, then the margin requirement is roughly 4.5%. Clearly, as you can margin under MIS 10 times - Just Rs.2116 *Cply.