InvestorQ : Why are crude oil prices so volatile in the market?
varsha Motwani made post

Why are crude oil prices so volatile in the market?

3 years ago

Crude oil happens to be one of the most interesting and volatile commodities. A majority of the players in the crude futures market are large Indian companies like ONGC, IOC and HPCL who have a genuine underlying exposure to oil and are looking to hedge their price risk. Even for small traders, Crude Oil futures offer a good way to participate in the movement of global crude prices.

Crude oil globally has been a highly volatile commodity. It has been largely driven by factors of demand and supply. There are two popular benchmarks for crude viz. Brent Crude and the West Texas Intermediate (WTI) Crude. While the Brent Crude is the more popular benchmark, the WTI is the benchmark for US crude. As the US will increasingly become an exporter of oil, the WTI is likely to become a more popular benchmark for global oil. But that could still be some time away. The key trend is that oil has been vertically down in the last 3 years, especially since November 2014. There are a variety of factors that impact the price of crude oil and most of them have been volatile.