Billions of dollars change hands each day based on benchmark prices
Fixing the price… of commodity pricing
Historians believe humans have used some sort of money for buying and selling for more than 30,000 years and, over those 30 millennia, our methods of establishing value for these transactions have evolved. In the digital age, commodity prices should be no different
Pricing and money have enabled us to move beyond bartering goods and services directly with our neighbours to build an increasingly sophisticated global trading economy. And at the very heart of our economies are the prices of the things we need to keep us alive and comfortable. Commodity prices hit the headlines when spikes cause pain to consumers. But, often less visibly, accurate prices enable the smooth running of the oil, gas, renewables, metals and agricultural sectors. So-called benchmark prices are used to inform buying decisions and value both cash-settled and physically delivered contracts—and billions of dollars change hands each day based on these prices.
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