How Is Oil Priced?

Crude oil plays a large role in both the global economy and everyday life. Each year, the world consumes some 4.2 billion metric tons of crude oil. At the same time, trillions of dollars’ worth of futures contracts trade hands in an attempt to profit from the black commodity. The average U.S. household consumes a little over 1,000 gallons of gasoline per year, which means that every dollar increase or decrease in price translates to $1,000 per year in gains or losses.