What factors determine the price of oil on the stock exchange?

Oil is a unique strategic product, the main energy resource. Its prices determine the development parameters of all industries.

Oil as an exchange commodity

The global oil market is developing irregularly. It is influenced by many economic and political factors. The conditions of economic growth of the world economy, structural changes in its sectors and segments, globalization, movement of production factors, geopolitical interests of developed countries, changes in the structure of energy consumption, environmental challenges, and social responsibility of governments and businesses - this is by no means a complete list of factors determining the oil exchange trading conditions in 2022.

Oil is a mono-product with a number of specific characteristics. Its sphere of application is actually the same - oil refining. At the same time, the obtained products are used in many sectors of the economy, primarily in transportation and energy.

The object of international oil trade on the exchange is crude oil and products of its refining. They include:

motor and power fuels;

• oils;
• carbon and high viscosity materials;
• petrochemical raw materials;
• special purpose petroleum products.

They are classified based on their purpose, physical and chemical properties, degree of purification, as well as their concentration of sulfur.

Crude oil has a number of specific characteristics, which undoubtedly affect its international commodity flows. They include the following:

1. A high degree of uncertainty ( risks) in the oil business, is associated with the exploration and production of oil.
   
   
2. The necessity to attract not only significant amounts of investments throughout the business chain but also specific ones. It is caused by location-related factors of different oil objects, which are a link in the energy chain.
   
   
3. The difference in natural characteristics of oil areas. We are talking about the quality of the field and its geographical remoteness from the target markets.
   
   
4. The exhaustibility of natural oil reserves. It is determined by their physical availability, technical capabilities, legal conditions, and economic feasibility of production.
   
   
5. The main natural oil reserves are concentrated in the hands of a few countries.

All these features affect the terms of oil trading at the exchange, which attracts the attention of speculators who want to diversify their portfolios or trade on the fluctuations of the asset value.

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