7 Factors Affecting US Crude Oil Price: Learn Types & How the Market Works
Thinking about trading crude oil? Then, you must be aware of the factors that affect the US crude oil prices.
US crude oil or USOIL is one of the most actively traded commodities in the world. From oil production to supply and economical conditions everything influences the oil price causing market volatility.
So, if you beginner or advanced trader starting USOIL trading, this post will guide you everything about crude oil, its types and what affects the oil prices. So, you can start oil trading with proper strategies and risk controls.
What is Us Crude Oil?
US crude oil is the oil mainly produced in the United States (US) and used as a oil grade for global use. US Crude oil is best known as WTI, which serves as a benchmark for global oil pricing.
Crude oil or USOIL is mainly a naturally occurring petroleum product, refined into energy and industrial products that make it one of the most actively traded commodities in the global financial market.
Because of being valuable and highly liquid, refiners and traders trade this commodity to capitalize on the volatile indices market. US crude oil is also occasionally called Texas Light Sweet oil, where the light refers to lower density, easy to refine oil, and sweet refers to low sulfur with clean fuel output.
USOIL, US Crude oil, or crude oil, whatever you say, it ultimately represents the same underlying commodity index.
Why is It Called WTI Crude Oil?
WTI refers to West Texas Intermediate, which is an oil grade or mix of crude oil, used for setting the assessed oil price for Atlantic basin crude oil prices reference. That is why crude oil is called WTI crude oil or US crude oil.
Basically, Midland, Texas, and Houston, Texas, respectively, are the places where crude oil is physically produced and then processed at Intermediate refineries, delivered from the global oil central hub- Cushing city in Oklahoma.
Types of Crude Oil for Trading
There are mainly two types of crude oil based on the oil quality- one is the light sweet crude oil (lower density, easily flows, easy to refine) and the other is heavy sour crude oil (higher density, thick flow, needs deep processing).
But in terms of benchmarks for oil prices, there are mainly 3 major and widely used crude oil benchmarks. They are-
1. WTI (West Texas Intermediate) Oil: Benchmark for the US Crude Oil Price
WTI is the primary price benchmark for the US light crude oil market, where the oil originates from oil fields in the United States. Most retail traders actively trade USOIL (WTI crude oil) due to its higher liquidity and trading volume.
2. Brent Crude Oil: Benchmark for Northern Europe & Global Oil Prices
Brent crude oil is the benchmark used for the light crude oil market in Northwest Europe and often reflects global oil prices on the ICE (Intercontinental Exchange). Sourced from the North Sea, Brent crude is widely used as a price reference for oil markets across Europe, Africa, and the Middle East.
3. Dubai/Oman Crude Oil: Benchmark for the Asian Oil Market
Dubai/Oman crude oil is primarily used for oil exported from the Middle East to Asian markets. Saudi Arabia’s national oil company, Saudi Aramco, uses this benchmark to determine crude oil prices for deliveries to Asia.
How is Crude Oil Price Determined?
The crude oil price is As US crude oil is determined based on the WTI US oil price, as it is traded against the US Dollar. Global crude oil buyers and sellers use this price as a benchmark for spot and future oil pricing, and to be traded in the indices market as well.
However, when it comes to the price of crude oil as trade grade, both Brent and WTI crude oil are traded internationally. But Brent crude oil is traded at a lower volume compared to the WTI or USOIL.
Well, most of the retail traders trade US crude oil. It’s because USOIL is comparatively easier to trade for beginner retail traders and hedgers, and the US oil price strongly reacts to the US-based data and news releases.
So, understanding US crude oil price drivers can help you trade USOIL with better risk management and profitable trading setups.
7 Factors That Affect USOIL Prices
Global oil supply and the demand rate are the key factors that affect the prices of USOIL or crude oil. Here are all the crude oil market drivers-
1. Global Supply of Crude Oil
Crude oil supply is the major driver of the US crude oil price. And this is not just in the WTI production; it applies to any crude oil production field.
For example, Brent crude oil reflects the global crude oil standards and trade in the London market. But any changes in the Brent crude oil production can affect the USOIL price, regardless of oil production in the WTI.
Again, the Organization of the Petroleum Exporting Countries (OPEC) produces around 37% of the world’s total crude oil, according to 2021 research by EIA.
According to the MDPI research paper,
“60% of global oil production is from non-OPEC countries like the WTI from North America and Brent from Europe.”
Though the majority of the crude oil originates from WTI and Brent, production from OPEC sometimes oversupplies the market, causing the USOIL price to drop.
2. Global Oil Demand
How much oil the world needs or consumes influences the US oil prices. Oil demand in the OECD (Organization for Economic Cooperation and Development) countries reduces which drops the oil price.
Contrarily, oil demand in the Non-OECD countries, like some developing countries (India, China, etc), showed growth in oil consumption. And this increased number is around 40%, which ultimately impacts the gross domestic production (GDP) growth. The chart below shows this increase from 2001 to 2025, with a total of 100 quarters.
The significant demand for oil includes advances in tech or hydraulic fracturing, or transportation demands for heating oil, causing the oil price fluctuation.
3. Geopolitical Tensions & Events
Different geopolitical events, like war or military conflicts, quickly affect the crude oil price. For example, any conflict among oil-producing regions of the world can disrupt the oil supply, indirectly causing the crude oil price increase.
For example, in 2014, WTI had a target of trading crude oil at about $107/Bbl, which got down by the year-end to around $54/Bbl. And this happened just because the Middle Eastern oil suppliers, Saudi Arabia, delivered crude oil at a cheaper rate to capitalize on the oil market share.
Again, during the COVID pandemic, oil production was reduced, causing the price increase. Such kind of global issues or oil politics affect the USOIL price and volume as well.
4. US Dollar Index
USOIL or crude oil on the global financial market is traded in the USD (US Dollar). So,
US Dollar Index or USDX, serves as an indicator of the overall condition of the U.S. economy. So, any fluctuations in the USD can influence the USOIL price.
A Case Study by World Scientific Connect found that the exchange rate is one of the most crucial factors affecting crude oil prices. This case study was done for the world’s top 5 economies, such as the USA, China, Japan, Germany, and India.
So, fluctuations in the currency exchange rate against the USD affect the crude oil price direction. For example, if the dollar strength drops, high chance of crude oil price increase.
5. US Economy Status
Energy runs the economy. So, any economic indicators directly impact the USOIL price. Weekly, Quarterly, or Monthly economic reports in the USA, like unemployment data, inflation data, or GDP (Gross Domestic Product) analysis data, can impact the crude oil price.
Again, any news release from EIA (US Energy Information Administration) drives the crude oil prices. This is mainly called the inventory announcements on crude oil volatility. And mostly traders rely on the data releases from EIA about the crude oil price movement and volatility for future crude oil trading.
6. US Weather Change
More than 50% of oil production comes from WTI crude oil. So, any changes in the US weather highly impact the crude oil prices.
For example, recently Winter storm in the US caused some disruption in the WTI oil production. And is estimating that the production drops by as much as 2 million barrels a day, or about 15 % of national production.
Another potential oil price driver is heating oil consumption. The northeastern part of the US is the world’s largest heating oil consumer. So, based on the US weather and the demand for household heating oil can influence the WTI oil price.
However, index traders trading USOIL rely on the Energy Information Administration (EIA) release about the crude oil price for market stability.
7. Environmental Regulations
Recent research and studies indicate that environmental policy drives the oil price for carbon emissions and energy transitions.
For example, Carbon taxes and emission rules make oil more expensive, affecting both the supply side and demand side. In Europe, companies must pay high fines if they release too much carbon. These penalties can reach about €100 per ton, which raises oil costs even when oil prices are low.
Policies like the green innovation and development of electric vehicles are affecting the oil price volatility.
How the US Crude Oil Market Works
The US Crude oil market works mainly based on the global supply and demand of crude oil. And this mostly depends on the US crude oil production by year analysis. When the US oil production increases, the price drops, affecting the USOIL market volatility.
That said, USOIL refers to WTI crude oil, which is traded on the NYMEX (New York Mercantile Exchange) and COMEX (Commodity Exchange, Inc) for future trading and the Forex (Foreign Exchange) market for Forex/ CFD trading.
Professional traders trade futures contracts, while most retail traders access oil prices through derivatives. Besides, the spot market works for the physical buying and selling of crude oil. But Brent crude oil is traded on the ICE- the Intercontinental Exchange market, mostly traded for commodities.
Commercial users like the airlines, oil producers, oil refiners, and institutional hedgers control and dominate the oil markets for trading. From retail beginner indices traders to experts, all depend on the NYMEX and COMEX for USOIL trading.
How Do People Trade US Crude Oil?
Crude oil trading is done by buying and selling oil and oil-related assets on the dedicated oil market or trading platforms. You can trade USOIL or crude oil in different ways, like CFDs, or crude oil futures contracts, or options contracts, without owning the oil or physical delivery.
Another common way to trade crude oil is to trade on spot prices on the spot market. This is mostly used US crude oil trading method for the US traders.
| USOIL Trading Methods | Best For | Risk Exposure |
|---|---|---|
| CFDs | Beginner retail traders | Moderate |
| Futures | Advanced traders | Higher |
| ETFs | Beginners to medium traders | Moderate |
| Options | Hedgers & Speculators | High |
Trading U.S. Crude Oil Using CFDs (Most Popular for Retail Traders)
CFDs (Contracts for Difference) allow traders to speculate on crude oil price movements without owning the asset. This is the most common and popular way for retail and short-term traders. Leverage is available, which can amplify both profits and losses.
Trading Symbols (varies by broker)
- USOIL
- WTI
- WTIUSD
- OILUSD
Best for: Beginner indices traders, retail traders, day traders, swing traders
Trading U.S. Crude Oil via Futures Contracts
These are agreements to buy or sell oil at a set price on a future date. Futures follow the actual oil price directly and are mostly used by professional traders. One futures contract controls 1,000 barrels of oil. So, a little price movement impacts the higher.
Trading Symbols
- CL – WTI Crude Oil Futures (NYMEX)
- CL1 / CL2 – Continuous futures (used on platforms like TradingView)
Best for: Institutional traders, oil companies, hedge funds, and advanced retail traders
Trading U.S. Crude Oil Using ETFs & ETNs
Oil ETFs (Exchange-Traded Funds)are funds or commodity pools that track oil prices and trade like stocks. They are a simple way for investors to get oil exposure without managing futures contracts. Ideal for medium- to long-term trading. These ETFs can be leverage-based, equity-based, or futures-based.
Trading Symbols
- USO for United States Oil Fund
- BNO for United States Brent Oil Fund
- OILK
Best for: Investors, beginner to medium-level traders
Trading U.S. Crude Oil Using Options Stock
Options oil give traders the right, but not the obligation, to buy or sell crude oil futures at a fixed price with an expiry date of contracts. Traders use call options for bullish views and put options for bearish views. Risk is limited to the premium paid, but strategies can be complex.
Trading Symbols
- CL Options (Calls & Puts on WTI futures)
Best for: Institutional traders, hedgers, speculators
Besides, for trading Brent crude oil, you can trade on the ICE markets, and available symbols are UKOIL or BZ/LCO/BRN, etc depending on different platforms.
Is Us Crude Oil Trading Profitable?
Yes, US crude oil trading can be profitable if only traded with proper strategies and risk management. Simply put, USOIL trading can be profitable, but profitability is not guaranteed.
Why Traders Are Attracted to USOIL?
- High liquidity
- Strong price movements
- Clear reaction to news and data
- The Reality for Beginners
High volatility of the USOIL market increases both opportunity and risk, attracting the retail commodity traders.
However, emotional mistakes are common, but profitability solely depends on discipline and risk management, not speed or frequency of trades.
Is Us Crude Oil Suitable for Beginners?
No, crude oil can be suitable for beginners and expert-level traders, but it comes with high risk. So proper risk-management strategies are a must for crude oil trading. But beginners can easily trade US crude oil using USOIL trading signals.
SureShotFX (SSF) recently started offering USOIL signals for indices and commodity trading, along with other major indices. It offers both free signals and premium VIP (paid) crude oil signals on the Telegram channel. So, beginners without any crude oil market knowledge can easily trade USOIL using SSF USOIL signals.
Final Wrap
Hopefully, now you know what impacts the US crude oil prices and how the USOIL trading is done. Whether you trade USOIL manually or thinking about some profits from WTI oil trading, try SureShotFX indices signals.
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Frequently Asked Questions for Crude Oil Price
No, crude oil is a non-renewable resource. Crude oil is formed over millions of years of organic materials buried under heat and pressure.
42 U.S. gallons are in a barrel of crude oil. This is (approximately 159 liters or 35 imperial gallons).
Though the price of crude oil depends on the supply and demand of crude oil. For example, WTI crude has ranged between $60–$120 per barrel in recent years, which is considered the standard.
According EIA, 2024 reports, there are around 132 crude oil refineries in the US processing more than 18 million barrels of oil daily.
Two main types of crude oil are lower-density sweet oil and higher-density sour oil. Sweet oil contains low sulfur used for gasoline products, and sour oil comes with higher sulfur and is used for diesel and industrial products.
Mainly, the oil refineries like WTI, OPEC, and institutional hedgers control the crude oil price.
