Oil is a resource utilized for power and energy to operate the various machines that humans rely on. It is commonly known as petroleum. Its significance for consumers is evident, as they rely on oil for their daily activities.

Additionally, businesses require oil to operate their machinery and maintain production levels. However, similar to other market commodities, not all regions can produce oil in equal quantities. This disparity leads to the establishment of the oil market, which aims to balance the supply and demand for oil.

Oil is traded through the buying and selling of oil futures. Futures are contracts that bind two parties to conduct a transaction at a specified price and date in the future. These contracts are standardized regarding quality, quantity, and transaction date, and they are traded on regulated futures exchanges.

The primary exchange markets for crude oil are the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE). These exchanges are overseen by the Financial Services Authority (FSA) in the UK and the Commodity Futures Trading Commission (CFTC) in the US.

The various types of oil produced also influence how and where it is traded. Generally, when people refer to oil, they are talking about crude oil, which is the most commonly traded type on international markets.