Trading and Price Discovery for Crude Oils

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This book offers a historical overview of the international oil market, tracing its evolution into the world's largest commodity market. Despite its complexity and maturity, the market is far from perfect, having been dominated by companies and governments for most of its 150-year history, with only a brief period of relative freedom. This has led to economic shocks, high prices, and geopolitical instability. By focusing on market power, the book elucidates the concept of "oil price" and its determination, providing insights applicable to other commodities. It discusses the transition from a competitive early industry to the monopolistic practices of Standard Oil and later international cartels, including OPEC, which struggled to maintain control after the 1986 price collapse. The text highlights the significance of oil benchmarks like Brent and WTI in modern trading. It also examines the influence of oil traders, the impact of consuming nations' policies, and recent developments such as the negative pricing phenomenon in the U.S. and the role of AI in market operations. The author, Adi Imsirovic, brings extensive experience in oil trading and energy economics, contributing valuable expertise to the discussion.