From Elite Wiki

A commodity found on the F8 markets screen (if you have installed SW Economy OXZ).

Traded in TCs & stored in the Cargo Hold for trade.

It is only produced in agricultural worlds with a moderate TL of 6 or more.

It is cheap in agricultural worlds, and expensive in industrial worlds.

   Like water, oxygen is vital for life support in space. In modern space technology, oxygen is widely used as a component of rocket fuel and to produce energy in fuel cells. On the other hand, you can produce oxygen if you have enough water and energy.
   In an Ooniverse with quirium-based technology using oxygen as rocket fuel will be obsolescent, so presumably the life-supporting role of oxygen will be predominant. Oxygen production in situ cannot be available in all cases, due to water and/or energy deficiencies. Oxygen storage and delivery is essential for emergency reasons. Definitely, gentlemen, there is good reason to have oxygen in our trade goods list.
   Oxygen can be obtained directly from oxygen-rich air. Advanced agricultural worlds have dense oxygen-rich atmospheres. Of course, trade in oxygen is based on more advanced technology than the mere bottling of pure fresh water. This issue can be solved using additional filters to define system market.
   Oxygen is more costly than fresh water and even more costly than food. Not due to manufacturing costs per se, rather due to issues with the storage and transportation of liquid oxygen. But like water there is large-scale production with negligible price fluctuation.