Like the stock market, the crude oil market is made up of different participants that include both investors and speculators. But the crude oil market differs because it is more prone to volatile swings due to geopolitical forces.

The 2 main types of oil that futures contracts are based on are West Texas Intermediate (WTI) and North Sea Brent. WTI is a lighter and sweeter type of oil better for gasoline production with a low sulfur content of around 0.24%. North Sea Brent is heavier and best for diesel fuel production. It has a sulfur content of roughly 0.37%. In the oil industry, crude oil with a sulfur content below 0.5% is considered “sweet.”

The modern history of the crude oil market began in the 1970s. Then crude oil prices spiked to more than $100 per barrel after Saudi Arabia imposed an embargo on the commodity. Oil prices declined in the 1980s as supplies increased. The price of crude oil had fallen below $10 per barrel by 1998, which marked a major low point at the time.

Prices then exploded higher, and the price of crude oil hit its all-time high of $145.31 per barrel in July 2008 to coincide with the global financial crisis. Since 2008, oil prices have fluctuated between $32 and $112 per barrel. The commodity currently trades at $53.12 per barrel for WTI and $58.82 for Brent crude. The price difference is known as the Brent/WTI spread.