Crude oil

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Crude oil is the world's most actively traded commodity. It is divided into two types, "sweet" and "sour". "Sweet" crude oil contains less than 0.5 percent sulfur. "Light sweet crude oil" is the most sought-after version because it can be most easily processed into gasoline. The term "sweet" originated because the low level of sulfur gives the oil a slightly sweet taste. Nineteenth century prospectors tasted small quantities of the oil to determine its quality.

Sour crude oil is crude oil containing sulfur, an impurity which makes it a lower quality crude. When the total sulfur level in the oil is less than 1 percent the oil is called "sour." The heavier and more sour the crude, the more difficult and expensive it is to turn into usable refined products.^[1] Sour crude is therefore usually processed into heavy oil such as diesel and fuel oil.

The two most heavily traded futures contracts on crude oil are the Brent Crude Oil contract and West Texas Intermediate Light Sweet Crude Oil. WTI crude is the flagship contract of the New York Mercantile Exchange (Nymex). Brent crude oil is offered at the Intercontinental Exchange (ICE), as well as at Nymex.

Nymex trades the WTI for both physical delivery and financial settlement, but its Brent contract is cash-settled only.

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