Oil pricing- how is it calculated?
Crude oil comes in three grades- UAE Dubai Crude, North Sea Brent Crude and West Texas Intermediate. The entire oil industry uses these three grades as a benchmark. The oil from individual fields is compared with the three grades and priced accordingly. Oil production does not vary by season, but sales may differ because of macroeconomic factors.
The cost of recovering crude oil varies between oil fields. Onshore oil – from oil fields in the Middle East costs the least to produce. Recovering oil from North Sea deep water oil rigs and from oil rigs in the Arctic is more expensive.