Oil (Crude Oil)
The world's most traded commodity and a primary energy source that significantly influences global economic activity.
What is Oil?
Crude oil is a naturally occurring fossil fuel extracted from the earth and refined into products including gasoline, diesel, jet fuel, and petrochemicals. It is the world's most actively traded commodity, with prices influencing everything from transportation costs to inflation and corporate earnings across virtually all sectors. Oil prices are primarily driven by OPEC production decisions, global demand growth, U.S. shale output, geopolitical events, and inventory levels. Investors access oil through commodity futures contracts (traded on the NYMEX and ICE), energy ETFs, oil company stocks, and MLPs. The two main oil benchmarks are West Texas Intermediate (WTI) and Brent Crude.
Example
In March 2022, following Russia's invasion of Ukraine, WTI crude oil prices surged above $130 per barrel — a 13-year high — as markets feared supply disruptions. This spike contributed to the highest U.S. inflation rates in 40 years, illustrating how oil prices transmit into consumer prices across the entire economy through fuel and transportation costs.
Source: U.S. Energy Information Administration — Crude Oil Prices