Crude oil is the world's largest volume physical commodity. Over the past decade the market for the NYMEX light, sweet (low sulfur) crude oil futures contract has exploded into the World's Most liquid form for crude oil trading. The Exchange's light, sweet contract, the world's largest volume futures contract trading for an underlying physical commodity, is a benchmark for international crude pricing. Cushing. Oklahoma, the contract's delivery point, is the nucleus Of U.S. spot crude trading and is accessible to the international spot crude market via pipelines operated by ARCO Pipe Line Co. and Texaco Trading and 'Transportation Inc.

By providing for delivery- of several grades of domestic and international crudes, the NYMEX sweet crude contract is designed to serve the complex and diverse needs of the vast oil marketplace.

Light, sweet crudes are preferred by refiners because their lot sulfur content and relatively high yields of high value products such as naphtha, gasoline, middle distillates, and kerosene allow them to be economically processed in the typical cracking refinery.

However, most of the world's crude oil supply is not made up of the light, sweet varieties, but consists of the so-called Sour, or higher Sulfur crudes. Worldwide, about 60% of petroleum production and 80%; of the economically recoverable oil reserves are sour.

The sweet crude contract specifies delivery of six domestic and four foreign crudes. Producers, drillers, gatherers, traders, and refiners are among the main commercial users well suited to trade crude oil futures. Secondary commercial users include a broad spectrum of businesses with a financial interest in the petroleum industry.

For refiners and traders using the NYMEX heating oil and gasoline contracts, crude oil futures provide a unique opportunity to hedge and spread both the raw material and the finished products. Since crude and refined product prices can, and do, move independently of one another, the ability to spread trade crude and products (the "crack spread") provides the ability, to lock in refinery margins.