For the past month and a half I have researched and followed Crude Oil prices in order to gain a better understanding of exactly what this commodity is, how it is traded, how it effects our overall market as well as our everyday lives. During this time I’ve learned the importance of understanding how and why commodities are traded everyday and will share with you exactly what I have learned from my research.
In 1859 Colonel Drake stuck oil for the first time and became the first man to create an oil well in which he produced roughly 15 barrels of oil per day. Once word spread of this discovery you saw many men attempt to accomplish the same feat and create oil wells of their own. Some of oil’s first uses were as a lubricant and to light kerosene lamps. It wasn’t until 1889 that Gottleib Daimler built the first combustion engine that could run on gasoline as fuel. Many people questioned the discovery and his motives however, once Ford Motor Company decided to put this idea to use we never looked back on oil as the fuel to our automobiles.
We started to see a big change in demand for oil once people began to rely on automobiles for transportation and during the World Wars, most specifically, World War II when much of the machinery, aircraft, tanks and other artillery used oil as its’ fuel.
Even though many of us simply think of oil as solely used to fuel automobiles you may be surprised by the vast ways it can be used such as in everyday items like plastics, make-up, paint, vitamins, dish soap and candles. With the ever increasing and popularity of oil we have seen much more production and speculation about possible shortages since oil is a limited resource there are now attempts to use the product in a more conservative manner in order to limit a shortage.
I also took a look at the top producer, importers and exporters of Crude Oil. The top producers in the world include Saudi Arabia, Russia, United States, Iran and China. The top importers...