Crude oil is a liquid fuel source located underground.It is extracted by drilling Wells.Crude oil is used in transportation, petroleum products and plastics.
composition:
Fifty to seventy percent of crude oil is hydrocarbons.Six to 10 percent of that is nitrogen, oxygen and sulfur.Less than 1% are metals, such as copper, nickel, vanadium and iron.
Oil is called a fossil fuel because of its origin.It was created 400 million years ago, when the remains of prehistoric algae and plankton fell to the sea floor.It combines with mud and is then covered by sediment.Over millions of years, enormous pressure heated the wreckage.It first becomes a waxy substance called kerogen.After more pressure and heat, it becomes liquid oil.That’s why it’s a non-renewable resource.When that supply disappears, it takes millions of years for new oil to form.
use:
Crude oil is the basis of many products.These products include transportation fuels such as gasoline, diesel and jet fuel.They also include fuel oil for heating and power generation.In 2017, the United States consumed 7.3 billion barrels of crude oil.Of that, 47 percent goes to gasoline, 20 percent to heating oil and diesel, and 8 percent to jet fuel.When hydrocarbons burn, they give off the heat that formed them.In addition, they release carbon dioxide.
Crude oil also produces petroleum products, according to the EIA report.When used in combination with other chemicals, oil is the base of more than 6,000 items.
Petroleum by-products can be used to produce tar, bitumen, paraffins and lubricants.It is also used in chemicals such as fertilizers, perfumes, pesticides, soaps and vitamin capsules.
Oil is the base of plastic, from heart valves to plastic bags.It is used in aircraft, PVC pipes and carbon fibre in cosmetics.For example, it takes about 16 gallons of crude oil to produce a sofa.About 40 percent of textiles contain some petroleum by-products.
species:
WTI intermediate crude is of very high quality because of its light weight and low sulfur content.For these reasons, it is often referred to as “light, sweet” crude.
These properties make it ideal for making gasoline.That’s why it’s the main benchmark for U.S. crude oil.
Brent crude is a combination of crude oil from 15 different fields in the North Sea.It’s “lighter” and “sweeter” than WTI, but still perfect for making gasoline.
It is refined in north-west Europe and is the main benchmark for European crude oil from Africa.
Shale oil is crude oil that sits between layers of shale rock.The rock must be broken up to allow access to the reservoir.New technology allows this oil to enter the market at a competitive price.As a result, oil prices fell.This created the us shale boom and bust from 2014 to 2016.
The oil price:
Crude oil prices measure the spot price of various oils, the most common of which are WTI intermediate and Brent blends.Opec’s basket price and NyMEX futures prices are sometimes cited.
According to the EIA report, WTI is $7 cheaper per barrel than Brent.The difference is the increased supply of WTI from US shale producers.The price of other crude on both continents is usually not much different from Brent, that is, Brent minus $0.50.
The Opec price basket is the average of oil prices from Algeria, Indonesia, Nigeria, Saudi Arabia, Dubai, Venezuela and Mexico.Opec uses this price package to monitor the state of the world oil market.Opec prices are lower because of the higher sulphur content of oil from those countries.This makes it more “sour” and less useful for making gasoline.
Almost every major U.S. newspaper reported the price of crude oil futures on the New York Mercantile Exchange.This is the value of 1,000 barrels of oil over an agreed time period in the future.The oil is usually WTI.In this way, NYMEX predicts how oil traders will view future WTI spot prices.But because oil traders have no way of knowing about sudden supply disruptions, futures prices are very close to spot prices.
Crude oil investment:
There are many ways to invest in crude oil, but it’s not for the faint of heart.Oil prices are volatile and difficult to predict.
Crude oil futures are agreements to buy and sell oil for a specified number of days.Companies use them to determine the price of oil they will need in the future.
The trader never owns the futures contract, but only sells it before the expiration date.
Oil etFs are easier to invest in than crude futures.They follow the price of crude oil futures.Some oil ETFs follow the shares of oil companies, but they are not volatile.Their prices are influenced by oil and the stock market.Even if oil prices rise, ETF prices can reflect the impact of crude on the economy if investors withdraw money from oil company shares
Higher oil prices raise the price of other fuels, such as gasoline, home heating oil and natural gas.Petrol prices account for 55 per cent, and distribution and taxes for the remaining 45 per cent.This has pushed up the cost of power generation and manufacturing.
Oil prices affect 96 percent of shipments, according to the EIA.This has led to higher food prices.It also affects 43 percent of industrial products, 21 percent of residential and commercial uses, and 3 percent of electricity.So a rise in oil prices increases the cost of everything you buy, causing inflation.
Burning oil or gasoline releases stored carbon dioxide.Gases remain in the earth’s atmosphere.Like blankets on a carpet, they bounce off the earth’s surface and trap the sun’s heat.It creates the greenhouse effect.