Light Sweet Crude
The term light sweet crude oil, defines the kind of crude oil that is used in the making of gasoline, kerosene, heating oil, jet fuel and diesel fuel. It contains very little sulfur, has a low density and is known to have a sweet taste and pleasant smell. Given that it has so many uses, it is in very high demand worldwide since it is preferred by refineries because of its many uses. With producers scattered from North America to the Far East, this commodity is not only in high demand, but it is one of the most actively traded commodity.
Light Sweet Crude also has the distinction of being the largest-volume futures contract trading commodity. It is traded in volume unit of 1,000 barrels and the main delivery point in the United States of America is located in Cushing, Oklahoma. Cushing also serves as the delivery hub for the international market through pipelines. The largest markets however for light sweet crude oil can be found in London, New York and Singapore.
In the crude oil market it must be noted that there are three different benchmarks used to determine prices. Brent, which is considered the world benchmark and West Texas Intermediate, which is the United States benchmark used to price crude oil sales in the United States. Then there is OPEC basket price - Organization of Petroleum Exporting Countries - benchmark which is the average of 15 different types of crude oil on the market.
At the moment, the current market price for light sweet crude oil futures has fallen for June delivery due to the recent outbreak of swine flu. With the flu being declared an emergency, there is fear that this will reduce the demand for jet fuel especially in the airline industry since consumers are being warned to avoid travel to affected areas. This in turn would mean that there will be a drop in the purchase of light sweet crude oil from traders.
Light sweet crude oil is forecasted to be costing about $57.00 per barrel within the end of the year. However, this trend depends on the market demand and supply since it is noted that during the summer, there is a higher demand for light sweet crude oil in its various forms since this is a high peak vacation travel period. Likewise, in winter, where as jet fuel demand sees a notable drop, there is a raising demand for heating oil and gasoline because of the cold temperature.
At the moment with cutbacks expected within the airline industry, a major player in the jet fuel market; it is expected that the price of oil will continue to slump.
The current market at the close of trade on April 27th at 08:03pm was $49.98 per barrel of light sweet crude oil a drop of -$1.57 cents or – 3.05%. The session range $49.72 to $50.19 for the day. The day low for light sweet crude oil was at $49.72. However, the previous day trade saw prices at $50.14 per barrel, and the day high was $51.55. The price of light sweet crude is expected to continue falling on the charts before it raises again to meet the year end forecast as the world still seek to recover from the recession that is now hitting the globe.