<p>Crude oil is the most traded commodity globally, serving as a key energy source and a significant driver of the world's economy. It is primarily refined into various products, such as gasoline, diesel, and jet fuel. The two main benchmarks for crude oil are West Texas Intermediate (<a href="/NewSite/encyclopedia/wti/" class="ency-link">WTI</a>) and <a href="/NewSite/encyclopedia/brent-crude/" class="ency-link">Brent Crude</a>, which are used to price a significant portion of the world's oil production.</p>

<h2>How It Works</h2>
<p>Crude oil is typically traded on a futures exchange, with contracts representing a fixed amount of oil to be delivered at a specific time and location. The two main contracts are WTI, traded at CME Group's New York Mercantile Exchange (NYSE Arca), and Brent Crude, traded at the Intercontinental Exchange (ICE) in London. Prices are determined by supply and demand dynamics, geopolitical factors, and global economic indicators. Traders can also use Contracts for Difference (CFDs) to speculate on crude oil price movements without owning the underlying commodity.</p>

<h2>Why It Matters</h2>
<p>Crude oil's importance lies in its widespread use as an energy source. It fuels transportation, powers industries, and heats homes. Consequently, its price has a significant impact on inflation, economic growth, and consumer spending. For investors, crude oil offers an opportunity to diversify portfolios and hedge against inflation. Additionally, the transition towards renewable energy sources creates new investment opportunities in the oil and gas sector, as companies adapt their business models to meet evolving demand.</p>