Petroleum products are products that are obtained in the process of oil refining. They are created by distillation of this raw material, from which fractions differing in the boiling range are separated by distillation.
The petroleum market can be divided into the market for light petroleum products, which includes gasoline, diesel fuel, and the market for dark petroleum products: bitumen, fuel oil, oil and more.
Oil product buyers are oil trading companies, gas station networks. And exchanges act as intermediaries at which trades are carried out in the most convenient ways for companies, as well as settlements and deliveries.
The largest exchanges in the world
The bulk of oil trading in the world is carried out on the following exchanges:
- The New York Mercantile Exchange (NYMEX) is an American exchange established in 1872 and ranked first in the world in oil futures trading.
- The London International Petroleum Exchange (ICE, formerly IPE) is an exchange founded in 1980.
- Singapore SGX, created in 1999 after the merger of the Singapore Stock Exchange and the Singapore Currency Exchange. This exchange is computerized, where trading is carried out exclusively in electronic format.
Exchanges in Russia
Compared to world leaders, Russian exchanges are very young, but at the same time gaining rapid momentum. The main trading is carried out by two exchanges:
- Exchange of petroleum products St. Petersburg (SPbMTSB).
- Moscow Interbank Currency Exchange (MICEX).
Their main task is to organize a market for goods with the most simplified mechanism for determining the price of oil, oil products and other raw materials produced in Russia. The largest exchange platform in Russia is nevertheless recognized as the Saint-Petersburg petroleum products exchange . Bidding, except for petroleum products, is carried out here by oil, gas, energy, forest and agricultural products.
Exchanges connect oil refiners and traders who supply it to the state’s fuel market. All petroleum products sold on the exchange have a price that is formed by supply and demand. However, most of all prices depend on the economic policies of states and the price policy of suppliers - traders.
The price in practice cannot be lower than stock quotes , although theoretically such an opportunity exists. The cost must be well known not only to companies directly associated with petroleum products. In fact, all structures of state and commercial type are connected today with the prices of gasoline, diesel fuel, kerosene and so on. Therefore, fluctuations in these prices will in any case have an impact on the company's activities, regardless of its affiliation and scale.
Oil products exchange (St. Petersburg)
Today this exchange is the largest oil products exchange in Russia. It was created in the first half of 2008, and on the twenty-third of September of the same year, the first auction took place.
CJSC RDK implements clearing services for all bidders.
The founders of the exchange are companies, including Russian Railways, VTB-Invest, Rosneft, Gazprom Neft, Transneft and others.
SPIMEX Oil Products Exchange trades in real goods and derivatives contracts. On the spot market, all basic groups of oil products are sold. And in the derivatives market, futures are traded.
Oil products exchange St. Petersburg implements exchange and over-the-counter transactions. The main commodities on the exchange from raw materials mined in Russia and the CIS countries are petroleum products. Trading in other goods is also carried out by the Saint-Petersburg Petroleum Products Exchange. Calculation of the railway tariff and deliveries are carried out here in the same way as on other exchanges.
2014 indicators
Currently, the turnover of Russian oil products on the exchange is about 95%. From 2011 to 2013, the total trading volume amounted to more than 915 billion rubles, and it is increasing every year. So, in 2013, the volume exceeded 13.5 million tons of oil products, and in 2014 amounted to almost 17.5 million tons. In the derivatives market last year, trading volumes exceeded 3.5 billion rubles. The gas trading volume in 2014 was over 521 million cubic meters.