I would like to know if the prices are determined as being shown on T.V. at london brent and us Light's prices or there are other factors that determine how much to sell a barel of oiel.

Please enligthing your guy

Basically, it's mainly demand. How many people want to pay for how much quantity. If there are many people willing to buy a large quantity of crude, every other thing remaining unchanged, price will rise. If the number of buyers and the quantity demanded reduces, price will fall.

Then there is supply: even when the same number of people willing to buy crude remain the same, if supply changes, there will be a change in crude price too. If supply increases, there will be a drop in price, and if supply reduces, there will be a rise in price.

Then there are other factors mostly to do with forecasting. They are several.

@denex

guy tanx

If i may pick from your post, does it mean that it is being traded like securities on our stock exchange?

Crude oil used to be aboutthemost precious commodity on earth. But renewables are challenging it's dominance.

Instabilty in oil producing countries, have goone a long way in jerking up the prices lately.
These include war in Iran, The intrangescence in Iraq, The unrest in Nigeria.
These trouble spots, create an artificial shortage in production and therefore speculation in future productivity and price hike.

Bankole01:

Instabilty in oil producing countries, have goone a long way in jerking up the prices lately.
These include war in Iran, The intrangescence in Iraq, The unrest in Nigeria.
These trouble spots, create an artificial shortage in production and therefore speculation in future productivity and price hike.

before those things started happening,what in the world determines the prices?

The process of negotiation and interaction between buyers and sellers.

@seun

i still need to know if there is a market where these negotiations take place, is it like a trading floor?

Demand/Supply; Speculation (e.g. futures market)

cost of production and speculation by traders

Gettolove:

@seun

i still need to know if there is a market where these negotiations take place, is it like a trading floor?

Yes it is traded on the floor New York exchange, the FTSE in London, etc

Oil markets explained
Big movements in the oil price have significant ramifications around the world. But just what makes the price move and how do the oil markets work? BBC News takes a closer look.
Crude oil, also known as petroleum, is the world's most actively traded commodity.

The largest markets are in London, New York and Singapore but crude oil and refined products - such as gasoline (petrol) and heating oil - are bought and sold all over the world.

Crude oil comes in many varieties and qualities, depending on its specific gravity and sulphur content which depend on where it has been pumped from.

If no other information is given, an oil price appearing in UK and other European media reports will probably refer to the price of a barrel of Brent blend crude oil from the North Sea sold at London's International Petroleum Exchange (IPE).

Futures contract

This would commonly be in a futures contract for delivery in the following month.

In this type of transaction, the buyer agrees to take delivery and the seller agrees to provide a fixed amount of oil at a pre-arranged price at a specified location.

Futures contracts are only traded on regulated exchanges and are settled (paid) daily, based on their current value in the marketplace.

The minimum purchase is 1,000 barrels.

World benchmark

Because there are so many different varieties and grades of crude oil, buyers and sellers have found it easier to refer to a limited number of reference, or benchmark, crude oils. Other varieties are then priced at a discount or premium, according to their quality.

Brent is generally accepted to be the world benchmark, although sales volumes of Brent itself are far below those of, for example, some Saudi Arabian crude oils.

According to the IPE, Brent is used to price two thirds of the world's internationally traded crude oil supplies.

In the Gulf, Dubai crude is used as a benchmark to price sales of other regional crudes into Asia.

This is not because there are more supplies of Dubai crude oil than of any other grade - there are not - but because it is one of the few Gulf crudes available in single, on the spot, sales as opposed to long term supply contracts.

However, if supplies became extremely limited and price swings became exaggerated, a new benchmark would have to be found.

US benchmark

In the United States, the benchmark is West Texas Intermediate (WTI).

This means that crude oil sales into the US are usually priced in relation to WTI.

However, crude prices on the New York Mercantile Exchange generally refer to 'light, sweet crude'.

This may be any of a number of US domestic or foreign crudes but all will have a specific gravity and sulphur content within a certain range.

'Sweet' crude is defined as having a sulphur content of less than 0.5%.

Oil containing more than 0.5% sulphur by weight is said to be 'sour'.

Slightly confusingly, the Organisation of Petroleum Exporting Countries (Opec) - a cartel of some of the world's leading producers - has its own reference.

Opec basket

Known as the Opec basket price, this is an average of seven - always the same seven - crudes.

Six of these are produced by Opec members while the seventh, Isthmus, is from Mexico.

Opec aims to control the amount of oil it pumps into the marketplace to keep the basket price within a predetermined range.

In practice, the price differences between Brent, WTI and the Opec basket are not large. Crude prices also correlate closely with each other.

Opec's basket price is an average of the prices for:
Saudi Arabia's Arab Light
The United Arab Emirates's Dubai
Nigeria's Bonny Light
Algeria's Saharan Blend
Indonesia's Minas
Venezuela's Tia Juana Light
and Mexico's Isthmus.

Oil markets explained
Big movements in the oil price have significant ramifications around the world. But just what makes the price move and how do the oil markets work? BBC News takes a closer look.
Crude oil, also known as petroleum, is the world's most actively traded commodity.

The largest markets are in London, New York and Singapore but crude oil and refined products - such as gasoline (petrol) and heating oil - are bought and sold all over the world.

Crude oil comes in many varieties and qualities, depending on its specific gravity and sulphur content which depend on where it has been pumped from.

If no other information is given, an oil price appearing in UK and other European media reports will probably refer to the price of a barrel of Brent blend crude oil from the North Sea sold at London's International Petroleum Exchange (IPE).

Futures contract

This would commonly be in a futures contract for delivery in the following month.

In this type of transaction, the buyer agrees to take delivery and the seller agrees to provide a fixed amount of oil at a pre-arranged price at a specified location.

Futures contracts are only traded on regulated exchanges and are settled (paid) daily, based on their current value in the marketplace.

The minimum purchase is 1,000 barrels.

World benchmark

Because there are so many different varieties and grades of crude oil, buyers and sellers have found it easier to refer to a limited number of reference, or benchmark, crude oils. Other varieties are then priced at a discount or premium, according to their quality.

Brent is generally accepted to be the world benchmark, although sales volumes of Brent itself are far below those of, for example, some Saudi Arabian crude oils.

According to the IPE, Brent is used to price two thirds of the world's internationally traded crude oil supplies.

In the Gulf, Dubai crude is used as a benchmark to price sales of other regional crudes into Asia.

This is not because there are more supplies of Dubai crude oil than of any other grade - there are not - but because it is one of the few Gulf crudes available in single, on the spot, sales as opposed to long term supply contracts.

However, if supplies became extremely limited and price swings became exaggerated, a new benchmark would have to be found.

US benchmark

In the United States, the benchmark is West Texas Intermediate (WTI).

This means that crude oil sales into the US are usually priced in relation to WTI.

However, crude prices on the New York Mercantile Exchange generally refer to 'light, sweet crude'.

This may be any of a number of US domestic or foreign crudes but all will have a specific gravity and sulphur content within a certain range.

'Sweet' crude is defined as having a sulphur content of less than 0.5%.

Oil containing more than 0.5% sulphur by weight is said to be 'sour'.

Slightly confusingly, the Organisation of Petroleum Exporting Countries (Opec) - a cartel of some of the world's leading producers - has its own reference.

Opec basket

Known as the Opec basket price, this is an average of seven - always the same seven - crudes.

Six of these are produced by Opec members while the seventh, Isthmus, is from Mexico.

Opec aims to control the amount of oil it pumps into the marketplace to keep the basket price within a predetermined range.

In practice, the price differences between Brent, WTI and the Opec basket are not large. Crude prices also correlate closely with each other.

Opec's basket price is an average of the prices for:
Saudi Arabia's Arab Light
The United Arab Emirates's Dubai
Nigeria's Bonny Light
Algeria's Saharan Blend
Indonesia's Minas
Venezuela's Tia Juana Light
and Mexico's Isthmus.

Thanks Bankole01, You have answered the question very well, U must be in the Oil Industry

Oil is traded by approved "traders" at the designated Stock exchanges or thru fone calls ; online on trading sites etc like the Bank dealers.

Only the Major exchanges get reported in the International media