The crude oil market participants

Petroleum producers

Generally, crude oil reaches the market from oil-extracting enterprises, that can be either small companies or huge corporations. It is logical that a company's influence on the market depends on the volume of the delivered oil. Consequently, other market participants pay a lot of attention to the gold producers activity.

Industry

This category is constituted by the industrial companies of all economic sectors as well as oil refining and processing companies. The scheme is called a vertically-integrated structure. Such companies produce crude oil, refine it to a finished product (gasoline, mazut etc.), but distribute it in their own retail chain.

Commodity and crude oil markets

In some countries there are separate sectors of the largest markets, which deal with trading, with the crude oil in particular.

Investors

The market investors have different interests, thus vesting in the instruments, related to crude oil. Normally, the most popular instruments among the investors of gold market are the futures.

OPEC

The Organization of Petroleum-Exporting Countries – the international intergovernmental organization, established by petroleum-refining authorities with the purpose to stabilize the oil prices. The members of this organization are the countries, which economies depend on the profit from crude oil export. The OPEC, as an organization, was created at the conference in Bagdad on September 10-14, 1960. Initially, the following countries were members of the OPEC - Iran, Iraq, Kuwait, Saudi Arabia and Venezuela (the initiator of establishment). Later on, these five countries, were joined by 9 countries: Qatar (1961), Indonesia (1962-2008, November 1, 2008 seceded the OPEC), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973-1992, 2007), Gabon (1975-1994) and Angola (2007).
At present time, the OPEC enumerates 12 members, taking into account the changes in the structure in 2007 - a new member of organization Angola and the returning of Ecuador. In 2008, Russia announced about its readiness to become an observer in the cartel.

Crude Oil Trade

The oil produced across the world is not of the same quality and, consequently, differs in price. The prices depend on the density and the various paraffin admixtures that are added to the oil blends. The standard for the prices is the “Brent” oil grade, which is similar in composition to the one extracted in the North Sea, and the delivery contracts are settled at London raw exchange market. The price for this grade is often set up by Mass Media.
Mostly, this price is a contract value for "Brent" oil in next month. When signing such contract called the futures, the buyer is obliged to pay and accept the delivered product, and the seller - to deliver it to the place indicated.
Futures contracts are being concluded at appropriate bourses and paid away daily at the current market price. The minimal contract volume is 1000 barrels.
The main trading floors for the oil deals are the leading stock exchanges, such as NYMEX, CME, РТС and LOE.

Oil Price

Oil was a newsmaker of the last year along with the topic of the global financial crisis. Having reached the maximum of 147.26 USD per barrel on June 11, 2008, it lost 70 % of its price in half of a year. Analytics assumed that the main reason for the falling was overheating of the market caused by speculative capital. From the fundamental point of view, 100 USD per barrel was acceptable, but oil just could not cost 140 USD per barrel. 
At last, in late 2008 oil stabilized within the range of 40-50 USD per barrel, and until the spring of this year it fell down to 38-42 USD per barrel. Meanwhile, it was not bound to the dynamics of the American currency, that was significant for it in the first half-year. It is difficult to say if the oil market groped the bottom. If for a half of the year it was outbidding, then now it is oversold. At that moment the fair price was 101 US dollars and now amid the situation in the world economy new fair price is 70-90 US dollars per barrel. Though, hope of oil quotations reach those levels of 2009 are groundless.
This fundamental factor was crucial in oil rates’ fall in 2008. Financial crisis entailed serious problems in the real sector of economy. Fuel demand started to decrease. At the same time, when oil quotations ascended in the first half-year of 2008, this rise was not corroborated by the oil demand.
In summer, the largest world agencies and investment companies predicted the oil price not to reduce below 100 US dollars per barrel. Moreover, there was a forecast that oil will up to 150-200 US dollars per barrel. Such forecasts are not casual, if the fact, that the biggest investment companies had their own positions on the oil market and recommendations' rise was on their behalf, is taken into consideration.

Major funds' and investment companies' participation in the rally on the oil market became one of the reasons of such fast price fall. Nevertheless, at that time financial crisis overwhelmed the world and nobody cared about fraud on the primary market. The liquidity crisis forced to sell all the assets including primary contracts. Weak macroeconomic data and expectations of the demand for fuel reduction aggravated the situation all over the world.