What It Is:
Sweet crude is a type of yet-to-be refined oil which contains minimal amounts of impurities.
How It Works/Example:
Sweet crude oil meets standards for low levels of contaminants such as sulfur (below one percent). In addition, sweet crude oil is characterized by the presence of hydrogen sulfide and carbon dioxide, which make it versatile in the manufacture of kerosene, diesel fuel and especially gasoline.
Crude oil is usually compared to sour crude oil which is high in sulfur and other impurities and difficult and costly to refine.
Why It Matters:
The high quality nature of sweet crude oil make it versatile and easy to refine. It is the most valuable grade of oil in the market. For this reason, it is a widely-accepted choice as an underlying commodity in the futures market.