The Statistics and History of Crude Oil 4 The Statistics and History of Crude Oil A mixture of comparatively volatile liquid hydrocarbons (compounds composed mainly of hydrogen and carbon with some nitrogen, sulfur, and oxygen) that occurs in the Earth’s crust and is extracted for use as fuel and various petroleum products, what is this? Crude oil. Because crude oil is a mixture of widely varying constituents and proportions, its physical properties also vary widely. Crude oil is first pumped up from the ground in it’s simplest form. Later, crude oil is transported by pipeline, train, tanker truck, barge, or ocean tanker to oil refineries where it is later sold to factories, gas stations, and car manufactures. From their it is used to fuel automobiles and machines that later create items such as plastic, cotton, and even metals. Crude oil and oil products refiners and marketers use the futures market to hedge crack spreads and trading margins. There it is separated into simpler mixtures, some ready for use and others to undergo further chemical treatment. Crude oil is essential to our day to day lives and this is the reason why I selected crude oil as my commodity. Its curative powers are calculated to remove pain and alleviate human suffering and disease.
Distilled feet below the earth’s surface, this remarkable liquid is Mother Nature’s oil proved reserves as of December 31, 1997. This is 0.5 percent, 106 million barrels bounteous gift of healing. It is my pleasure to do my commodities challenge on this astonishing substance. The United States had 22,351 million barrels of crude, less than in 1996 and it is the eighth consecutive year that crude oil proved reserves have declined . How ever, reserve additions of crude oil replaced 95% of 1997 oil production, the best replacement rate in 8 years! This chart is or reserve additions from 1993-1997. The company transports crude oil to its refineries principally by ship and through pipelines, which link its plants with import terminals. After the refining process, it moves petroleum products to its storage terminals by ship, barge, pipeline and rail. The company operates a 13-strong international tanker fleet, totaling two million deadweight tones. It also has two specialist support vessels to facilitate the transport of crude oil around the world. Each company also has approximately 20 tankers on long-term charter, as well as a large number of coastal vessels. Crude oil is what creates a very important substance to us, petroleum.
The article that was reviewed was entitled: Field Courses Gives Petroleum Geo scientist a Top-to-bottom View of the Structural Geology of Oil Exploration. This article is about a course that will be taught at the Southwest Research Institute that will help geologist identify oil reserves under the surface of the earth. The institute designed this course not only to help oil companies in their ...
Why is it so valuable? How does it differ form other valuable resources? Why is petroleum created for crude oil so important for humans in their everyday lives? Petroleum provides man hundreds of useful products. We burn petroleum for fuel, but the variety of things we make from it is incredible. It is a vitally important, nonrenewable source. Our society runs on it. Petroleum in the form of gasoline powers nearly every U.S. automobile on its annual drive of some 10,000 miles. Petroleum is a mixture containing hundreds of molecular compounds. There are five major crude oils, naphtha, kerosene, middle distillates, and fuel oils. They come from five major crude oil founders, Boscan, Maya, Arabian Light, West Texas Intermediates, and Bass Strait. See the chart to view the product content of five major crude. Only nine countries in the U.S. had new field discoveries, 114 million barrels, reported in 1997. Of these, only four contributed more than 1 percent to the total.The four major crude oil new field discoveries in the us are Gulf of Mexico Federal Offshore, North Dakota, Texas, and New Mexico. The definition of the word supply is the quantity of a product (or service) that sellers are willing and able to provide at a given price according to Commodity Challenge. In my own words I would describe supply as the quantity of a commodity that is in the market and available for purchase at a particular price. Demand, by definition according to Commodity Challenge, is the quantity of a product (or service) buyers are willing and able to purchase from the market at a given price. I would describe demand as the amount of good the public is willing and able to purchase at a specific price.
By: tito E-mail, April 6 - The good news for consumers is gas prices are anticipated to drop this summer. But the bad news is the decline will be slow. With an increase in international oil production as a backdrop, the Energy Department today dramatically revised its forecast for summer gasoline prices. The agency said prices should peak later this month and begin dropping sometime in May, ...
The market place according to The New Merriam-Webster Dictionary is, the world of trade or economic activity. In my own words I would put it as the global being of business, trade, and economics. The petroleum demand and supply outlook for the mid-price case is based on assumed normal temperatures and GDP growth of 2.8 percent per year in 1998 and 2.0 percent in 1999. To enhance the usefulness of the mid-case forecasts, sensitivities of energy demand and supply are also derived, using alternative macroeconomics, price and weather assumptions. A 1% increase in real GDP raises crude oil demand by about 0.6 %; natural gas demand by 1.1%; coal demand by 0.7%; and electricity demand by 0.6 % (Figure 28 ).
The impact of shifts in economic growth varies, depending upon distribution of incremental growth across energy-intensive and non-energy-intensive sectors. A 10% increase in crude oil prices, assuming no price response from non-petroleum energy sources, reduces petroleum demand by 0.3%. The firms and individuals that buy my commodity in its simplest form are Gulf of Mexico Offshore, Oryx Energy Company, and Natural Gas Corporation The companies that purchase crude oil include Green Canyon Block, Shell Oil Company, Boscan, Maya, Arabian Light, West Texas Intermediates, and Bass Strait and later refine it.
If my commodity demand increases while supplies stay the same the demand curve shifts to the right causing the cost of the commodity to rise because there is already a high demand for crude oil. Also the equilibrium price will rise. 0 10 20 30 40 50 60 If the demand of my commodity decreases while the supply of my commodity stays the same the market price of my commodity would decrease. This is because there would by more crude oil than desired by the buyers at a given price so possibly lowering the price could higher the demand. 0 10 20 30 40 50 60 If the supply increases for my commodity while demand stays the same once again the market price of crude oil would decrease. The reason for this is there would be more of a crude oil supply in the market at a certain price that is desired by the buyers, but if the price is decreased the demand would match it. 0 10 20 30 40 50 60 If the supply decreases for my commodity while demand stays the price of crude oil will increase. The reason for this is there would be less crude oil supply in the market at a certain price that is desired by the buyers, but if the price is increased the demand would match it.
Demand is defined as the amount of goods and services that buyers need in the market. The law of demand states that the higher the price of goods or services in the market the lower the demand when all factors are kept constant. Under natural condition, buyers will buy that product whose price will not force them to forgo another more valuable product. The interaction of price and demand is called ...
0 10 20 30 40 50 60 If the supply and the demand both increase the price of the commodity would stay the same because they would balance out. 0 10 20 30 40 50 60 If the supply and the demand both increase the price of the commodity would stay the same because they would balance out. 0 10 20 30 40 50 60 If the temperature would suddenly decrease dramatically (below 140 degreases Fahrenheit) it would be hard for the production of crude oil to be taking place. This would result in a supply decrease. In this scenario the price of my commodity would raise in the market place. If the U.S. were to find a cheap and efficient source of energy that would replace crude oil in the market, the demand for crude oil would decrease. In this scenario the price of my commodity would decrease in the market place. The textbook definition of a futures contract is a established price today for a commodity that will be delivered at a later date. I would define it in my own words as a fixed price that will be set in the succeeding time given. First I would like to talk about the background and history of crude oil. There were few takers of the 19th century crude oil that came to be called “snake oil.” It was one of the less successful uses of crude oil, but not the first to claim healing properties.
Ancient Persians, 10th century Sumatrans, and pre-Columbian Indians all believed that crude oil had medicinal benefits. Marco Polo found it used in the Caspian Sea region to treat camels for mange, and the first oil exported from Venezuela (in 1539) was intended as a gout treatment for the Holy Roman Emperor Charles V. The mysterious oil that sometimes seeped to the earth’s surface had other uses as well. In Mesopotamia around 4000 BC, crude oil, was used as caulking for ships, a setting for jewels and mosaics, and an adhesive to secure weapon handles. Egyptians used it for embalming, and the walls of Babylon and the famed pyramids were held together with it. The Roman orator Cicero carried a crude-oil lamp. And, in North America, the Senecas and Iroquois used crude oil for body paint and for ceremonial fires. Crude oil – as petroleum directly out of the ground is called – is a remarkably varied substance, both in its use and composition. It can be a straw-colored liquid or tar-black solid. Red, green and brown hues are not uncommon. The image of James Dean dripping with black oil from his Texas gusher in the 1956 movie “Giant” may have been compelling, but it’s not descriptive of today’s oil producers.
High gas prices can make you stop and think about your commute. See hybrid car pictures to see models that save you money.In May 2008, average gas prices in the United States approached, and in some places passed, $4.00 a gallon, shattering records. But this was nothing new to American consumers. May was a month of records that broke one after another, and that came on the heels of months of ...
For one thing, the days when a gusher signaled a big discovery are long gone. Since the 1930s, oil producers have used blowout preventers to stop gushers. In addition, not all crude oils behave in the Hollywood manner. Some flow about as well as cold peanut butter. Until the late 19th century, an oil find often was met with disinterest or dismay. Pioneers who settled the American West dug wells to find water or brine, a source of salt; they were disappointed when they struck oil. Several historical factors changed that. The kerosene lamp, invented in 1854, ultimately created the first large-scale demand for petroleum. (Kerosene first was made from coal, but by the late 1880s most was derived from crude oil.) In 1859, at Titusville, Penn., Col. Edwin Drake drilled the first successful well through rock and produced crude oil. What some called “Drake’s Folly” was the birth of the modern petroleum industry. He sold his “black gold” for $20 a barrel. Petroleum was prized mostly for its yield of kerosene until the turn of the century. Gasoline was burned off, and bitumen and asphalt (the heavier parts of crude oil) were discarded. But gradually rising in importance were the incandescent light and the internal combustion engine.
The former relied on oil-fired generating plants; the latter, on gasoline. By the 1920s, crude oil as an energy source, not just as a curiosity, came into its own. But to many, it’s still as mysterious as it was to ancient man. Even in the petroleum industry, most people never see crude oil. Geologists generally agree that crude oil was formed over millions of years from the remains of tiny aquatic plants and animals that lived in ancient seas. There may be bits of brontosaurus thrown in for good measure, but petroleum owes its existence largely to one-celled marine organisms. As these organisms died, they sank to the sea bed. Usually buried with sand and mud, they formed an organic-rich layer that eventually turned to sedimentary rock. The process repeated itself, one layer covering another. Then, over millions of years, the seas withdrew. In lakes and inland seas, a similar process took place with deposits formed of non-marine vegetation. In some cases, the deposits that formed sedimentary rock didn’t contain enough oxygen to completely decompose the organic material. Bacteria broke down the trapped and preserved residue, molecule by molecule, into substances rich in hydrogen and carbon.
Many of the most disruptive events for the world's economies over the past several decades have originated in the world market for oil (Mankiw, 1998, pg 105). In 1970 s, members of Organization of Petroleum Exporting Countries (OEC) raised the world price of oil to increase their income and were most successful at maintaining cooperation and high prices in the period from 1973 to 1985. The price ...
Increased pressure and heat from the weight of the layers above then caused a partial distillation of the organic remnants, transforming them, ever so slowly, into crude oil and natural gas. Although various types of hydrocarbons, molecules made of hydrogen and carbon atoms, form the basis of all petroleum, they differ in their configurations. The carbon atoms may be linked in a ring or a chain, each with a full or partial complement of hydrogen atoms. Some hydrocarbons combine easily with other materials, and some resist such bonding. The number of carbon atoms determines the oil’s relative “weight” or density. Gases generally have one to four carbon atoms, while heavy oils and waxes may have 50, and asphalts, hundreds. Hydrocarbons also differ in their boiling temperatures – a key fact for refiners who separate the different components of crude oil by weight and boiling point. Gases, the lightest hydrocarbons, boil below atmospheric temperature. Crude oil components used to make gasoline boil in the range of 55 to 400 degrees Fahrenheit. Those used for jet fuel boil in the range of 300 to 550 degrees, and those for diesel, at about 700 degrees. There are three essentials in the creation of a crude oil field: First, a “source rock” whose geologic history allowed the formation of crude oil.
Three Big Oil Firms Post Record Profits WSJ 10. 25. 00/revised Commentary by Mark Gera ci 3 Q Financial Report and its US Economic Impact The three largest U. S. oil companies, Exxon Mobil, Chevron, and Texaco posted record third quarter profits earlier this week, crushing Wall Street s estimates and sending many analysts scrambling to adjust their fourth quarter outlooks. Making headline news ...
This usually is a fine-grained shale rich in organic matter. Second, migration of the oil from the source rock to a “reservoir rock,” usually a sandstone or limestone that’s thick and porous enough to hold a sizable accumulation of oil. A reservoir rock that’s only a few feet thick may be commercially producable if it’s at a relatively shallow depth and near other fields. However, to warrant the cost of producing in more challenging regions (the Arctic North Slope, for example) the reservoir may have to be several hundred feet thick. Third, entrapment. The earth is constantly creating irregular geologic structures through both sudden and gradual movements such as: earthquakes, volcanic eruptions and erosion caused by wind and water. Uplifted rock, for example, can result in domelike structures or arched folds called anticlines. These often serve as receptacles for hydrocarbons. The probability of discovering oil is greatest when such structures are formed near a source rock. In addition, an overlying, impermeable rock must be present to seal the migrating oil in the structure. The oldest oil-bearing rocks date back more than 600 million years; the youngest, about 1 million.
However, most oil fields have been found in rocks between 10 million and 270 million years old. Subsurface temperature, which increases with depth, is a critical factor in the creation of oil. Petroleum hydrocarbons rarely are formed at temperatures less than 150 degrees Fahrenheit and generally are carbonized and destroyed at temperatures greater than 500 degrees. Most hydrocarbons are found at “moderate” temperatures ranging from 225 to 350 degrees. It is the particular crude oil’s geologic history that is most important in determining its characteristics. Some crudes from Louisiana and Nigeria are similar because both were formed in similar marine deposits. In parts of the Far East, crude oil generally is waxy, black or brown, and low in sulfur. It is similar to crudes found in central Africa because both were formed from nonmarine sources. In the Middle East, crude oil is black but less waxy and higher in sulfur. Crude oil from Western Australia can be a light, honey-colored liquid, while that from the North Sea typically is a waxy, greenish-black liquid. Many kinds of crudes are found in the United States because there is great variety in the geologic history of its different regions.
Crude oil is a surprisingly abundant commodity. The world has produced some 650 billion barrels of oil, but another trillion barrels of proved reserves have yet to be produced. An additional 10 trillion barrels of oil resources await development, assuming the price of oil someday justifies production. These resources include bitumen, shale oil and oil in existing fields that might be produced through enhanced recovery methods. Talk of crude oil oozes with superlatives. Not only was crude oil the basis of the world’s first trillion-dollar industry, it also is the largest item in the balance of payments and exchanges between nations. And it employs most of the world’s commercial shipping tonnage. Crude oil may not be the panacea that snake oil claimed to be. But for 20th century industrialized nations, it has proved to be more than good medicine. To me at least, I see it as the biggest fuel on which our society is created on. Some other contracts trading at the exchange are Heating Oil, Unleaded Gasoline, Natural Gas, Petroleum, Silver, and Gold. At the NYMEX exchange the price quotation is in dollars and cents per barrel. Minimum price fluctuation is $0.01 per barrel, ten dollars per contract. The maximum daily price fluctuation is $15.00 per barrel, $15,000 per contract, for the first two contract months. Initial back month limits of $1.50 per barrel rise to $3.00 per barrel if the previous day’s settlement price in any back month is the $1.50 limit. In the event of a $7.50 move in either of the first two contract months, back month limits are expanded to $7.50 per barrel above the limit in place, in the direction of the move. Trading Unit for crude oil is 1,000 U.S. barrels, that would be 42,000 gallons. The trading hours are 9:35A.M.- 3:20P.M. (New York Time).
The last trading day is at the close of business on the third business day prior to the 25th calendar day of the month preceding the delivery month. Deliveries take place along the Texas U.S. Gulf Coast at one of several qualified marine terminals; by pipeline into designated pipeline connections; or out-of-storage. The difference between hedgers and speculators is that hedgers insure against the movement of the market in the wrong direction. On the other hand speculators are people who buy or sell commodities, hoping market will be favorable to their gambles. Some hedgers that would be involved with my commodity would be oil field owners. Chicago commodity exchange is futures market where crude oil, coffee, and soy bean are all traded on. The futures market is different from a stock market in the sense that a futures market is a commodity that you own and trade that will be delivered to you at a future time. In a stock market on the other hand you own and trade a part of a company. Name Farnaz Kermaani Commodity Crude oil Trading Firm Merrill Lynch June 99 Name Farnaz Kermaani Commodity Crude oil Trading Firm Merrill Lynch June 99 Name Farnaz Kermaani Commodity Crude oil Trading Firm Merrill Lynch June 99 Date Economic Factors & Effects on Supply, Demand, Price May 4 Fairly good weather which can result in the dwelling of crude oil to be successful. There for their will be a descent supply and more for people to supply increasing the price of the crude oil May 5 Not much rain or any other negative weather occurring to shift the temperature of the day but their was a somewhat cloudy day resulting in the somewhat bad weather May 6 The weather occurring to day was some what flaky in the sense of high winds their for the weather is bad and the temperatures fall dramatically their for the stock market drooped May 7 The day was somewhat dry and the continue throughout the world. The continued temperature of this weather was what resulted in the stock market went down and resulted in the weather. May 8 There is some troubles going on in the middle east that can result in the stock market settlement price that is now lowered in the stock market by a rather big way May 11 There is no important economic factors in the news. Market price should remain stable May 12 There is more of the middle east situation going on so the same reaction is taking place in the market once more as the say two days ago May 13 There is no major news that applies to economic factors there for resulting May 14 The weather was rather good their for the crude oil mining was in a rather stable mood that resulted in a supply decrease and a higher market price for my commodity May 15 The temperatures was at a rather high compared to usual resulting in the dwelling of crude oil that is in the supply and demand shifting of the charts May 18 The dry conditions continue throughout the states that continues the dryness could hurt the mining of the crude oil. With a possible drop in the supply and an increase in demand May 19 Much of the mining to day was good because of the bad weather factors that resulted in the demand and the supply of the crude oil commodity futures May 20 There is some troubles going on in the middle east that can result in the stock market settlement price that is now lowered in the stock market by a rather big way May 21 The day was somewhat dry and the continue throughout the world. The continued temperature of this weather was what resulted in the stock market went down and resulted in the weather. May 22 Fairly good weather which can result in the dwelling of crude oil to be successful. There for their will be a descent supply and more for people to supply increasing the price of the crude oil Name Farnaz Kermaani Commodity Crude oil Trading Firm Merrill Lynch June 99 Trade 1: I bought a stock trade of crude oil on Monday May 4 at the market price of $17.77. On Tuesday May 5th I sold the Commodity for $17.90. Trade 2: On Wednesday, May 6ht, I opened another position buyin gthe commodity at a low $17.75. I sold my commodity on Thursday, May 7th on the off set position o n the high for June at price $17.77 Trade 3: bought one futures on May 8th at the excellent price of $17.73. The following day on May 11 I sold that crude oil future at the not to greatly decreased price of $17.62 Trade 4: On Monday May 11th I sold the commodity for the price of commodity at $17.82 I also decided to buy another one of the offset positions in the price of the $17.62. On May thirteenth I sold the one commodity for the decreased price of $17.65 Trade 5: On Thursday May 14th I decided my features at the high risen price for the price of 17.34because the stock market was greatly so I bought one and unfortunately lost it the next day and the lowered price of $17.30 Trade 6: I bought one crude oil commodity features on the date of Monday May 15 for the high price of $17.39. To my dissatisfaction at an offset the next day the crude oil commodity was lowered to $17.19 Trade 7:I bought six crude oil futures at an open market on Monday May 18 for the month of June at the price of $17.19. I then sold the six features profitable futures the next day on Tuesday May 19 for the dramatically increase price of $17. 30 after a rise in the market on an offset. Trade 8: I bought two crude oil commodity futures on the market price of $17.20 some what low so I could gain more profit. I then sold the two commodities that I had bought on Tuesday May 19 for more feature on the day of May 20 for the great market price of $17.49 after a rise in the market place. Trade 9: I bought three crude oil commodity market futures after no decrease in the market price for the commodity crude oil on May 20 I decided to then sell all three the next day on May 21 at the lowered price of $17.01 Trade 10: I bought a on May 21 six crude oil futures each at $17.0. my crude oil commodity in the market place after a rise in the stock market to a price of $17.21 for this reason I sold all six on May 22. Name Farnaz Kermaani Commodity Crude oil Trading Firm Merrill Lynch June 99 Trade Date Position Buy Sell Price Loss Profit/Loss 5/5 Offset 1 $17.90 +0.13 +$535 5/7 Offset 1 $17.77 +0.02 +$137 5/11 Offset 1 $17.62 +.11 +$313
5/13 Offset 1 $17.65 -0.02 -$137
5/15 Offset 1 $17.39 -0.05 -$241 5/18 Offset 1 $17.19 -0.20 -$998 5/19 Offset 6 $17.30 +0.11 +$313 5/20 Offset 2 $17.49 +.29 +$1,210 5/21 Offset 3 $17.01 -.49 -$1,996 5/22 Offset 6 $17.21 -.20 -$998 Crude oil, a commodity that ranges way beyond it’s known definition. In my commodity challenge project I had learned an unbelievable amount. Through the trading period results I learned about the history of the stock market of crude oil. I also learned about how important crude oil is to our society and how our lives all depend on crude oil. I also learned about what a future is and how they work. I am more knowledgeable know in the area of trading and how to make profits. Though I did not come out with a profit on the trade-athon activity I still learned for future cases how to go about approaching it. In the supply and demand I learned about how less supply reaches towards higher prices and how more demand does so too. I learned what the equilibrium price is and about the market place. I learned about how the price of crude oil is established through it’s supply and demand factors. My favorite part of the commodity challenge I would have to say was getting to know my commodity because I got to get more creative of how to approach the report style and I got to put my own twist to it. It was also fun to make the charts that had to deal with what I wanted to talk about. Overall all parts of the commodity challenge were exciting and I learned a lot. Encarta Encyclopaedia, Petroleum, Microsoft, 1994 + 1995, Los Angeles. James W. Skelton, Jr., Potential Effects of the International Sales Convention on U.S. Crude Oil Traders, 9 Hous. J. Int’l The New Grolier Multimedia Encyclopaedia, Petroleum, Grolier Inc.,1993, New York. Rick Wilkinson, Speaking of Oil and Gas, BHP Petroleum, 1995, Melbourne. Tom Gruner and Lisa Edwards, Gruner and Edwards on the Carriage of Crude Oil by Sea, William Collins Sons & Co, 1987, London. James Atkins, Pipelines and Tankers of OPEC, Hennerwood Publications Ltd, 1993, New York. http://www.api.org/cat/toc/H25142.htm http://www.discoveryplace.com/html/Discussions/Markets-Oil,GasolineandotherPetroleumProducts/index.html i didnt paste right but i hope people could still get help out of it
Encarta Encyclopaedia, Petroleum, Microsoft, 1994 + 1995, Los Angeles. James W. Skelton, Jr., Potential Effects of the International Sales Convention on U.S. Crude Oil Traders, 9 Hous. J. Int’l L. 95-110 (1986) e?259 The New Grolier Multimedia Encyclopaedia, Petroleum, Grolier Inc.,1993, New York. Rick Wilkinson, Speaking of Oil and Gas, BHP Petroleum, 1995, Melbourne. Tom Gruner and Lisa Edwards, Gruner and Edwards on the Carriage of Crude Oil by Sea, William Collins Sons & Co, 1987, London. James Atkins, Pipelines and Tankers of OPEC, Hennerwood Publications Ltd, 1993, New York. http://www.api.org/cat/toc/H25142.htm http://www.discoveryplace.com/html/Discussions/Markets-Oil,GasolineandotherPetroleumProducts/index.html