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Oil (petroleum) consists mainly of hydrocarbons, stable and bright, thin to thick oily mixture, which occurs naturally as a raw material storage.(Crude oil)

Origin:

The origin of oil is still not fully resolved. The complexity and diversity of chemical composition of the origin of organic matter is given by following theory: The marginal seas with disable ground water circulation, the water in between land and coastal bars at the bottom is extremely poor in oxygen and rich in hydrogen sulfide that decay small plants and small animals; the high salinity inhibits the normal decay: carbohydrates, proteins and fats decompose the sludge passed over in marine organisms under the influence bacteria and enzymes are formed at particular pressure and temperature conditions with the help of mineral catalysts in petroleum . This process took place originally in Tonablagerungen, (the origin of the time since the Cambrian falls about 600 million years ago). However, presumably the time lacked sufficient quantities of organic matter, so that more oil can be detected only by Sinur (500 million years ago) in all geological formations to the present.

Deposits

The shapes of the deposits depend on the geological conditions, but mainly in rejecting the columns and other areas moved into the oil accumulates miles often “oil hoses” up to 4 feet thick or more with each other over many square miles. The largest oil and gas - reserves on the earth are in the Middle East (Iran, Saudi - Arabia) and in the Mediterranean (Libya) and in Venezuela in the United States, Romania and the USSR. The FRG is exploiting, among other things remarkable occurrence in northern Germany and in the foothills area.
In recent years, the oil production extended to underground deposits. In the North Sea area especially the Netherlands and Britain.

Exploration and production

Therefore, the extraction of oil prospecting and exploration of new deposits must precede (exploration). Unknown areas are - after a first inspection - photographed from the air and photogeologisch interpreted. The terrain will be judged favorably by field geologists (prospectors), then examined in detail whether they may contain petroleum traps. In statistics, one in eight test well is successful. In such a borehole drilling production wells are reported.

Preparation:

The produced crude oil is usually a mixture of oil, natural gas, salt water and mud. The raw material is examined for its usefulness through its analysis.

The preparation of the Nabols serves to remove unwanted components. In modern systems of treatment process is carried out wholly or partly during the transport of crude oil from the funding agency in the refinery.

Storage and transport:

crude oil is stored mainly in petroleum and petroleum products with fixed - or floating roof tanks with a capacity up to 20,000 m3. the type of transport depends on the location of the refinery and the tank farm and the location of outlets. The most economical means of transport for the carriage of large oil - or gas between two points is the pipeline . Pipelines consistently serve as a liaison between the oil field and refinery and port. Maritime transport in tankers should be efficient due to low cost and wide reach for the distribution of substantial amounts to various destinations. For onward transportation smaller tankers on inland waterways, Rail wagons and tank cars are used. Occasionally, petroleum products are transported from one refinery to a consumption center in pipelines.

Refining:

All distillates, including gas liquids (including gasoline cracking) should be checked before delivery to the consumer, are often re-treated before further processing. This is done to meet the market requirements for storage stability, odor, color, and the intended use to be, but also to remove corrosive components and catalyst poisons.

Right from the early 2000s there has been a inflation on the price of the barrels of the crude oil. It was generally under $25/barrel but during the 2003 it raised up to $30/barrel. Due to the geo political events and natural disasters, the global oil market had a strong short term effect on the oil prices such as the conflict that arose between Israel and Lebanon and North Korea missile tests, Hurricane Katrina, Iranian Nuclear plant and various other factors. By the year 2008, due to the global recession, the global oil price hit the peak that anyone wouldn’t have expected. It increased up to $147/ barrel. This recession cause the demand for the oil to grow up and energy demand shrink latter.

World crude oil demand grew at the rate of 1.6% on an average per year right from 1998 to 2006. Since all the Energy resources now depend on Oil, Energy Information Administration has reported that the world demand for the oil is project to increase by 37% from 2006 till 2030.It also states that although the Petroleum prices have reduces considerable in developed countries, a 3.5% rise will be observed in 2013 for petroleum by the developing countries and hence will cause a net rise of petrol demand during that period.

Transportation is of the major element that consumes the large proportion of energy and has seen a huge growth in the recent decades. With the increase in the number of vehicles, the oil demand also steeps up thereby increases the demand. It is predicted that cars and trucks consume the maximum usage of oil and thereby increase the oil usage by 75% in India and China. It is also predicted that China and India will still grown in the automobile segment making the use of Oils more mandatory.

Some countries have realised the outcome of global oil inflation and have already started preventive means of reducing this oil consumption. Countries such as Germany and United States have started using Oil free vehicles such as solar powered vehicles. This not only reduces the oil energy consumption but also reduces the global effect on the earth’s atmosphere. Oil charts have shown that there will be considerable reduction in oil consumption if alternative fuels such as bio plastic, bioasphault and other such bio fuels are used. This not only reduces the price but also keeps the inflation under check. The other factor than can be considered to keep oil demand in check is the transport demand management. If that is maintained in regularised manner then oil prices will not rise up.

As the countries develop, the industries, rapid urbanization will lead up to rapid increase in the consumption of oil. India and China lead the way in becoming the largest consumers of Oil. If this energy consuming prevails there will be another recession which might lead to global inflation and thereby result in the fall of the global economy. Let’s try to save energy and save our world.

The recent world wide economic downturn has caused a decline in all commodity prices. Copper, aluminum, coal, wheat, rice and almost every other commodity has experienced a sharp decline in price. The price of light sweet crude oil was no exception. From a high of $145.08 per barrel in 2008, it plunged to a low of $33.98 per barrel in 2009. The price of light sweet crude oil has recovered some value as it now trades around $78.00 per barrel.

The price of light sweet crude oil is controlled by several factors. For example, the recent plunge in price was not caused by a increased supply or improved technology but rather the combination of decreased demand, drawing down of inventory and no small amount of fear for the future. All three of these factors have somewhat diminished.

Demand for light sweet crude has increased because it is the preferred source of oil to produce gasoline, kerosene and diesel fuel. As personal incomes and industrial activity recover, the demand for automotive fuel and heating fuel can only increase. In the previous months, refiners allowed their stockpiles of fuels to reach extremely low levels. They are now forced to replenish their inventory and meet increased demand at the same time. The refiners have once again begun to buy light sweet crude oil in the significant quantities of the past.

The future contains a mixture of forces that tend to force the price of light sweet crude oil both up and down. The emerging economies of nations like China and India will require an ever increasing supply of light sweet crude oil for the production of fuels. As the economies of the industrialized nations like the United States and Britain recover from the recession, their demand will return to previous or even higher levels. The alternative to light sweet crude oil is the the heavier oil generally produced in the Middle East. This heavier oil has been cheaper to produce in the past but more difficult to refine than light sweet crude. The instability of this region and the increasing production costs make this heavier oil less attractive to refiners.

There are factors which could tend to drive down the price of light sweet crude oil. If the current economic recovery should falter or fail, the demand for oil will fall. Improved gasoline mileage is being mandated by many governments and demanded by most consumers. The environmental movement is opposed to continued reliance on fossil fuels and has many initiatives in place to decrease the use of fuels derived from light sweet crude and all other oils.

There is, of course, some disagreement over the future price of light sweet crude oil. To make sense of these contradictory forces driving the price of light sweet crude oil, the most important item for the investor is to determine the time frame in which the individual factor will have the most impact. The environmental and technological factors may eventually have a great impact. However, it is very unlikely that their impact will be seen in the near future. The current economic recovery indicates an increase in the price of light sweet crude oil for the short term. 2010 should see a continued increase in the price of light sweet crude oil with only temporary downward moves.