Encyclopedia  |   World Factbook  |   World Flags  |   Reference Tables  |   List of Lists     
   Academic Disciplines  |   Historical Timeline  |   Themed Timelines  |   Biographies  |   How-Tos     
Sponsor by The Tattoo Collection
Crude oil
Main Page | See live article | Alphabetical index

Crude oil

Crude oil consists of a mixture of petroleum liquids and gases (together with associated impurities) pumped out of the ground through oil wells.

Table of contents
1 Classification
2 Extraction
3 Pricing
4 Origins
5 The Origin of Crude Oil
6 See also
7 External links

Classification

The oil industry classifies "crude" by the location of its origin (e.g., "West Texas Intermediate, WTI" or "Brent") and often by its relative weight or viscosity ("light", "intermediate" or "heavy"); refiners may also refer to it as "sweet", which means it contains relatively little sulfur and requires less refining, or as "sour", which means it contains substantial amounts of sulfur and requires more refining in order to meet current product specifications.

Extraction

Generally the first stage in the extraction of crude oil is to drill a well into the underground reservoir. Historically some oil fields existed where the oil rose naturallly to the surface, but most of these fields have long since been depleted. Often many wells will be drilled into the same reservoir, to ensure that the extraction rate will be economically viable. Also some wells may be used to pump water or various gas mixtures into the reservoir to raise or maintain the reservoir pressure, and so maintain an economic extraction rate.

If the underground pressure in the oil reservoir is sufficient then the oil will be forced to the surface under this pressure. In this situation it is sufficient to place a complex arrangement of valves on the well head to connect the well to a pipeline network for storage and processing.

Over the lifetime of the well the pressure will fall, and at some point there will be insufficient underground pressure to force the oil to the surface and the remaining oil in the well must be pumped out.

Various techniques aid in recovering oil from depleted or low pressure reservoirs, including Beam Pumps, Electrical Submersible Pumps (ESPs), and Gas Lift. Other techniques include Water Injection and Gas Re-injection, which help to maintain reservoir pressure, usually at the cost of altering the ratio of these products in the produced oil.

Pricing

The price of oil fluctuates quite widely in response to crises or recessions in major economies, because any economic downturn reduces the demand for oil. On the supply side the OPEC cartel uses its influence to stabilise or raise oil prices.

During the last two years of the Clinton administration, crude oil prices rose steadily from just under $15/barrel to over $30/barrel. After the election of President Bush, prices dropped steadily over the next year to $20/barrel, but beginning in Jan. 2002 started climbing again, reaching $35 to $40/barrel by the late spring of 2004. [1] In the early spring of 1999 the average price of around US$14 per barrel (less than US $0.15 per liter), made crude oil the second-cheapest liquid in the world. In March 2003 Brent crude stood at US $33 per barrel.

The New York Mercantile Exchange (NYMEX) trades a lot of crude oil (including futures contracts) and provides the basis of US crude oil pricing via WTI (wets Texas Intermediate. Other exchanges also trade crude oil futures, eg the IPE in London trades contracts in Brent crude. Wet oil is normally bought and sold via bilateral deals between companies, typically with reference to a marker crude oil grade that is typically quoted via the pricing agency Platts, for example in Europe a particular grade of oil, say Fulmar, might be sold at a price of "Brent plus $0.25/bbl".

Origins

Most geologistss view crude oil, like coal and natural gas, as the product of compression of ancient vegetation over geological timescales. A few scientists, notably Thomas Gold, have suggested other, abiotic, theories for the origins of crude oil.

The Origin of Crude Oil

Crude oil, a malodorous yellow-to-black liquid, is a product of the decayed remains of prehistoric marine animals and terrestrial plants. Over many centuries, organic matter in mud was buried under additional thick sedimentary layers. Additional sedimentary layers, the increasing heat and pressure caused crude oil-saturated shales to form, from which the oil was expelled. It then moved through adjacent rock layers until it became trapped underground in porous rocks called reservoirs.

See also

External links

History and Analysis of Crude Oil Prices