Crude Oil Prices for Dummies

sample crude oil price chart

It can be a bit scary looking for financial information, particularly if you don't really understand what it is you're looking for. That's why we strongly suggest that you find a reliable, authoritative source for the information you seek, not to mention a source that has a solid grounding in the basics. We guess, however, that you probably don't want to turn to advice from content farms like eHow.com... or their daughter site, Sapling.com. That's where we found Jerusha Hardman and her post, "How to Track the Price of Crude Oil." It was originally published at eHow under the handle Si Kingston, but – for now, anyway – we'll work under the assumption that the author is Hardman and correct it later if needed.

Whoever wrote this, however, was clearly unfamiliar with crude oil. Hardman opened by "explaining" to her readers that,

"Crude oil is a naturally occurring material that is rich in hydrocarbons."

Really? Right there our staffer knew that Jerusha was utterly unqualified to write this content. Saying that crude oil is "rich in hydrocarbons" is a lot like saying that a book is "rich in words" or that a pair of jeans is "rich in fabric." Get the point? And although most people seem to think that the only use of crude oil is gasoline, Hardman's throwaway of

"...crude oil is pumped out of the ground and refined into the gasoline [sic] and other oil products..."

Definitely gives short shrift to the enormous variety of products derived from crude oil (and natural gas). Whatever the case, Jerusha pounded out three potential places to "follow," "track," or "find" something she called the "price of crude oil"; sending her readers to various websites (Yahoo, CNN, and CNBC). Well, at least she got their URLs right.

Where Hardman's instructions went wrong was in her failure to understand just what people would be looking at. We are quite certain that anyone who doesn't know where to find crude oil prices probably needs a little help understanding just what it is that they're looking at on those three websites.
Sure, it's the price of crude oil... but what crude? Hardman appears unaware that there are two different benchmarks, West Texas Intermediate (WTI) and North Sea Brent. The two typically have different prices, with Brent almost always higher than WTI. Hardman also doesn't seem to understand that these are futures contracts, with wholesalers bidding for product to be delivered not today but months in the future.

We ask you: would you rather have someone knowledgeable of the production of crude oil and the financial framework around its marketing tell you how to find a crude oil price? Or is the work of our Dumbass of the Day good enough? We sure don't think so.

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