Benchmark Crude Oil

  

Categories: Metrics, Index Funds, Econ

The oil by which all other oils are judged. Literally. With more than 200 forms of crude oil, traders and other buyers / sellers need a reference point.

Randolph found a barrel of oil and Mortimer wants to buy it. To establish a fair price, they agree to use Brent Sea Crude as their benchmark crude oil. At the end of the day, they check the Intercontinental Exchange (ICE) and see that Brent Crude closed at $74.82 per barrel, which Mortimer then pays Randolph in exchange for the found barrel.

Related or Semi-related Video

Finance: What are petro dollars?8 Views

00:00

Finance allah shmoop what are petro dollars Well they're just

00:07

money received from the mining of this guy's blood and

00:10

guts because yeah oil that's where it comes from yesterday's

00:15

stegosaurus is today's refined petroleum and we're talking about a

00:19

massive amount of dollars here like you could call them

00:22

master dollars or t rex a dollars or try sarah

00:26

dollars big wealth in the nineteen seventies came from the

00:30

petro era in the same way that it's led today

00:33

by amazon facebook and google When oil prices suddenly spiked

00:37

in the seventies the people who won well they were

00:40

the ones who had massive oceans of it underground We're

00:44

looking atyou saudi arabia and you texas and in times

00:48

when there is so much money coming into a system

00:50

with a shock well the economic driver of that wealth

00:53

becomes a kind of currency itself In fact china's made

00:57

all kinds of noise about making their currency now and

01:01

oil standard upgrading from the old gold silver and bronze

01:04

medal of shame standard that western civilization well he used

01:08

to hold so dear petro dollars petro wealth were still

01:11

feeling it and weigh no that that makes this guy

01:14

Happy at least if you're happy and you know it 00:01:18.389 --> [endTime] never moved

Up Next

Finance: What are lenders?
27 Views

What is the Relative Strength Index? The Relative Strength Index is a technical analysis indicator that measures trading direction trends over the...

Finance: What is Relative Return?
10 Views

What is Relative Return? Also referred to as alpha, relative return is return on investment (most often a mutual fund or ETF) that generates relati...

Finance: How Do You Judge the Performance of an Index Fund?
132 Views

How do you judge the performance of an index fund? For index funds, they're really just a reflection of the stocks and bonds they, uh... reflect. S...

Find other enlightening terms in Shmoop Finance Genius Bar(f)