Since the year 1974 the crude oil price was swinging in time as other commodity in the world market. The fluctuations of crude oil price and as one of the world’s basic necessities make this commodity as valuable as gold event called as black gold. Crude oil become a powerful commodity which can affect the world economy and can bring develop country to an end without it supply. The scenarios create a new energy controversy when oil takes place of coal as primary energy resource and became the energy exchange platform. Additionally, this black gold has a massive influent towards the other commodity price and affecting the domestic production.
Speaking of benchmarks it is refers to the oil makers which introduce to the world in the mid year of 1980 after the OPEC (Organization of Petroleum Exporting Countries) ability in controlling oil price is removed. There are about 161 kinds of different benchmark of crude oil which basically base on the grades of API. The trend of crude oil price reported in the media is actually referring to the Brent Blend benchmark. The crude oil benchmarks act as the oil markers which used by the seller and buyer as a reference as make the trading process easier. The three primary benchmarks is WTI (West Taxes Intermediate), Brent Blend, Tapis Crude Oil (Malaysia) and Dubai. The Brent crude oil is stand on the USD currency as the current price is around $114 USD/barrel.
International Petroleum Exchange (IPE)
International Petroleum Exchange which basically establish in London is one of the largest world energy exchanges. This energy exchange is the place where the contract of energy commodity such as oil fuels, natural gas and electricity being handle. The most influent and powerful IPE in the world is New York Mercantile Exchange, International Petroleum Exchange in London and Singapore International Monetary Exchange, the price of crude oil being setup and control at this energy exchange between the seller usually the oil company and the buyer. These systems of trading make the oil price strongly vulnerable to the supply and demand of the global. But yet, the oil pricing is also very sensitive due to other external forces such as politics, economics, natural and new discoveries.