Oil is a substance that is used for power and energy in order to run all the machines that we humans use. It is normally referred to as petroleum. It is important for consumers because they depend on oil for everyday activities. Naturally, companies also need oil to run their machinery and keep up production.
However, like other commodities on the market, not all regions can produce the same amount of oil. Thus, the oil market is created in order to match supply and demand of oil. Oil is traded through the purchasing and selling of oil futures. Futures are contracts that carry an obligation between two parties to make a transaction in the future at a predetermined price and date. Such contracts are standardized in terms of quality, quantity and transaction date and are traded on regulated futures exchanges. The main exchange markets for crude oil are the New York Mercantile Exchange (NYMEX) and the Intercontinental Exchange (ICE). These exchanges are regulated by the Financial Services Authority (FSA) in the UK and the Commodity Futures Trading Commission (CFTC) in the US.
The different types of oil that are produced also affect the way it is traded and where it is traded. As it is, when people talk about oil, they normally refer to crude oil, which is the type most traded the most on international markets.
The biggest consumers of crude oil are (in millions of barrels per day):
United States = 20.5
China = 6.5
Japan = 5.4
Germany = 2.6
Russia = 2.6
Canada = 2.3