   #copyright

Petroleum

2007 Schools Wikipedia Selection. Related subjects: Business; Geology and
geophysics

   Pumpjack pumping an oil well near Sarnia, Ontario
   Enlarge
   Pumpjack pumping an oil well near Sarnia, Ontario
   Ignacy Łukasiewicz - inventor of the refining of kerosene from crude
   oil.
   Enlarge
   Ignacy Łukasiewicz - inventor of the refining of kerosene from crude
   oil.

   Petroleum (from Latin petra – rock and oleum – oil) or crude oil (also
   known as black gold) is a black, dark brown or greenish liquid found in
   formations in the earth. The American Petroleum Institute, in its
   Manual of Petroleum Measurement Standards (MPMS), defines it as "a
   substance, generally liquid, occurring naturally in the earth and
   composed mainly of mixtures of chemical compounds of carbon and
   hydrogen with or without other nonmetallic elements such as sulfur,
   oxygen, and nitrogen."

   Petroleum is found in porous rock formations in the upper strata of
   some areas of the Earth's crust. It consists of a complex mixture of
   hydrocarbons, mostly alkanes, but may vary greatly in appearance and
   composition. Petroleum is used mostly, by volume, for producing fuel
   oil and petrol ( gasoline), both important " primary energy" sources (
   IEA Key World Energy Statistics). Petroleum is also the raw material
   for many chemical products, including solvents, fertilizers,
   pesticides, and plastics. 84% (37 of 42 gallons in a typical barrel) of
   all petroleum extracted is processed as fuels, including gasoline,
   diesel, jet, heating, and other fuel oils, and liquefied petroleum gas
   ; the other 16% is converted into other materials such as plastic.

   Known reserves of petroleum are typically estimated at around 1.2×10^12
   barrels with at least one estimate as high as 3.74×10^12 barrels
   (3,740,000,000,000). Consumption is currently around 84×10^6 barrels
   per day, or 31×10^9 barrels per year. Usable oil reserves are only
   about 1/3 of total reserves. At current consumption levels, world oil
   supply would be gone in about 33 years. However, this ignores any
   additions to known reserves, changes in demand, etc. As the supply of
   petroleum becomes more scarce, consumers may look to alternative fuel
   sources such as ethanol, photovoltaic, or clean-burning hydrogen.
   Petroleum forms naturally within the earth too slowly to be sustainable
   for human use.

Formation

Chemistry

   Octane, a hydrocarbon found in petroleum, lines are single bonds, black
   spheres are carbon, white spheres are hydrogen
   Enlarge
   Octane, a hydrocarbon found in petroleum, lines are single bonds, black
   spheres are carbon, white spheres are hydrogen

   The chemical structure of petroleum is composed of hydrocarbon chains
   of different lengths. These different hydrocarbon chemicals are
   separated by distillation at an oil refinery to produce gasoline, jet
   fuel, kerosene, and other hydrocarbons. The general formula for these
   hydrocarbons is C[n]H[2n+2]. For example 2,2,4-Trimethylpentane, widely
   used in gasoline, has a chemical formula of C[8]H[18] which reacts with
   oxygen exothermically:

   C[8]H[18](aq) + 12.5O[2](g) → 8CO[2](g) + 9H[2]O(g) + heat

   Incomplete combustion of petroleum or gasoline results in emission of
   poisionous gases such as carbon monoxide and/or nitric oxide. For
   example:

   C[8]H[18](aq) + 12.5O[2](g) + N[2](g) → 6CO[2](g) + 2CO(g) + 2NO(g) +
   9H[2]O(g) + heat

   Formation of petroleum occurs in a variety of mostly endothermic
   reactions in high temperature and/or pressure. For example, a kerogen
   may break down into hydrocarbons of different lengths:

   CH[1.45](s) + heat → .663CH[1.6](aq) + .076CH[2](aq) + .04CH[2.6](g) +
   .006CH[4](g) + .012CH[2.6](s) + .018CH[4.0](s) + .185CH[.25](s)

Biogenic theory

   Most geologists view crude oil and natural gas, as the product of
   compression and heating of ancient organic materials over geological
   time. According to this theory, oil is formed from the preserved
   remains of prehistoric zooplankton and algae which have been settled to
   the sea bottom in large quantities under anoxic conditions. (
   Terrestrial plants tend to form coal) Over geological time this organic
   matter, mixed with mud, is buried under heavy layers of sediment. The
   resulting high levels of heat and pressure cause the remains to
   metamorphose, first into a waxy material known as kerogen which is
   found in various oil shales around the world, and then with more heat
   into liquid and gaseous hydrocarbons in a process known as catagenesis.
   Because most hydrocarbons are lighter than rock or water, these
   sometimes migrate upward through adjacent rock layers until they become
   trapped beneath impermeable rocks, within porous rocks called
   reservoirs. Concentration of hydrocarbons in a trap forms an oil field,
   from which the liquid can be extracted by drilling and pumping.

   Geologists often refer to an "oil window" which is the temperature
   range that oil forms in—below the minimum temperature oil remains
   trapped in the form of kerogen, and above the maximum temperature the
   oil is converted to natural gas through the process of thermal
   cracking. Though this happens at different depths in different
   locations around the world, a 'typical' depth for the oil window might
   be 4–6 km. Note that even if oil is formed at extreme depths, it may be
   trapped at much shallower depths, even if it is not formed there. (In
   the case of the Athabasca Oil Sands, it is found right at the surface.)
   Three conditions must be present for oil reservoirs to form: first, a
   source rock rich in organic material buried deep enough for
   subterranean heat to cook it into oil; second, a porous and permeable
   reservoir rock for it to accumulate in; and last a cap rock (seal) that
   prevents it from escaping to the surface.

   If an oil well were to run dry and be capped, it would likely fill back
   to its original supply eventually. There is considerable question about
   how long this would take. Some formations appear to have a regeneration
   time of decades. Majority opinion is that oil is being formed at less
   than 1% of the current consumption rate.

   The vast majority of oil that has been produced by the earth has long
   ago escaped to the surface and been biodegraded by oil-eating bacteria.
   What oil companies are looking for is the small fraction that has been
   trapped by this rare combination of circumstances. Oil sands are
   reservoirs of partially biodegraded oil still in the process of
   escaping, but contain so much migrating oil that, although most of it
   has escaped, vast amounts are still present - more than can be found in
   conventional oil reservoirs. On the other hand, oil shales are source
   rocks that have never been buried deep enough to convert their trapped
   kerogen into oil.

   The reactions that produce oil and natural gas are often modeled as
   first order breakdown reactions, where kerogen is broken down to oil
   and natural gas by a set of parallel reactions, and oil eventually
   breaks down to natural gas by another set of reactions. The first set
   was originally patented in 1694 under British Crown Patent No. 330
   covering "a way to extract and make great quantityes of pitch, tarr,
   and oyle out of a sort of stone." The latter set is regularly used in
   petrochemical plants and oil refineries.

Abiogenic theory

   The idea of abiogenic petroleum origin was championed in the Western
   world by astronomer Thomas Gold based on thoughts from Russia, mainly
   on studies of Nikolai Kudryavtsev. The idea proposes that hydrocarbons
   of purely geological origin exist in the planet. Hydrocarbons are less
   dense than aqueous pore fluids, and are proposed to migrate upward
   through deep fracture networks. Thermophilic, rock-dwelling microbial
   life-forms are proposed to be in part responsible for the biomarkers
   found in petroleum.

   However, this theory is a minority opinion, especially amongst
   geologists and no oil companies are currently known to explore for oil
   based on this theory.

Means of production

Extraction

   The most common method of obtaining petroleum is extracting it from oil
   wells found in oil fields. After the well has been located, various
   methods are used to recover the petroleum. Primary recovery methods are
   used to extract oil that is brought to the surface by underground
   pressure, and can generally recover about 20% of the oil present. After
   the oil pressure has depleated to the point that the oil is no longer
   brought to the surface, secondary recovery methods draw another 5 to
   10% of the oil in the well to the surface. Finally, when secondary oil
   recovery methods are no longer viable, tertiary recovery methods reduce
   the viscosity of the oil in order to bring more to the surface.

Alternative methods

   As oil prices continue to escalate, other alternatives to producing oil
   have been gaining importance. The best known such methods involve
   extracting oil from sources such as oil shale or tar sands. These
   resources are known to exist in large quantities; however, extracting
   the oil at low cost without negatively impacting the environment
   remains a challenge.

   It is also possible to transform natural gas or coal into oil (or, more
   precisely, the various hydrocarbons found in oil). The best-known such
   method is the Fischer-Tropsch process. It was a concept pioneered in
   Nazi Germany when imports of petroleum were restricted due to war and
   Germany found a method to extract oil from coal. It was known as Ersatz
   ("substitute" in German), and accounted for nearly half the total oil
   used in WWII by Germany. However, the process was used only as a last
   resort as naturally occurring oil was much cheaper. As crude oil prices
   increase, the cost of coal to oil conversion becomes comparatively
   cheaper. The method involves converting high ash coal into synthetic
   oil in a multistage process. Ideally, a ton of coal produces nearly 200
   liters (1.25 bbl, 52 US gallons) of crude, with by-products ranging
   from tar to rare chemicals.

   Currently, two companies have commercialised their Fischer-Tropsch
   technology. Shell in Bintulu, Malaysia, uses natural gas as a
   feedstock, and produces primarily low-sulfur diesel fuels. Sasol in
   South Africa uses coal as a feedstock, and produces a variety of
   synthetic petroleum products. The process is today used in South Africa
   to produce most of the country's diesel fuel from coal by the company
   Sasol. The process was used in South Africa to meet its energy needs
   during its isolation under Apartheid. This process has received renewed
   attention in the quest to produce low sulfur diesel fuel in order to
   minimize the environmental impact from the use of diesel engines.

   An alternative method is the Karrick process, which converts coal into
   crude oil, pioneered in the 1930s in the United States.

   More recently explored is thermal depolymerization (TDP). In theory,
   TDP can convert any organic waste into petroleum.

History

   Petroleum, in some form or other, is not a substance new in the world's
   history. More than four thousand years ago, according to Herodotus and
   confirmed by Diodorus Siculus, asphalt was employed in the construction
   of the walls and towers of Babylon; there were oil pits near Ardericca
   (near Babylon), and a pitch spring on Zacynthus. Great quantities of it
   were found on the banks of the river Issus, one of the tributaries of
   the Euphrates. Ancient Persian tablets indicate the medicinal and
   lighting uses of petroleum in the upper levels of their society.

   The first oil wells were drilled in China in the 4th century or
   earlier. They had depths of up to 243 meters and were drilled using
   bits attached to bamboo poles. The oil was burned to evaporate brine
   and produce salt. By the 10th century, extensive bamboo pipelines
   connected oil wells with salt springs. The ancient records of China and
   Japan are said to contain many allusions to the use of natural gas for
   lighting and heating. Petroleum was known as burning water in Japan in
   the 7th century.

   In the 8th century, the streets of the newly constructed Baghdad were
   paved with tar, derived from easily accessible petroleum from natural
   fields in the region. In the 9th century, oil fields were exploited in
   Baku, Azerbaijan, to produce naphtha. These fields were described by
   the geographer Masudi in the 10th century, and by Marco Polo in the
   13th century, who described the output of those wells as hundreds of
   shiploads. (See also: Timeline of Islamic science and technology.)

   The earliest mention of American petroleum occurs in Sir Walter
   Raleigh's account of the Trinidad Pitch Lake in 1595; whilst
   thirty-seven years later, the account of a visit of a Franciscan,
   Joseph de la Roche d'Allion, to the oil springs of New York was
   published in Sagard's Histoire du Canada. A Russian traveller, Peter
   Kalm, in his work on America, published in 1748, showed on a map the
   oil springs of Pennsylvania.

   The modern history of petroleum began in 1846, with the discovery of
   the process of refining kerosene from coal by Atlantic Canada's Abraham
   Pineo Gesner. Poland's Ignacy Łukasiewicz discovered a means of
   refining kerosene from the more readily available "rock oil"
   ("petr-oleum") in 1852 and the first rock oil mine was built in Bóbrka,
   near Krosno in southern Poland in the following year. These discoveries
   rapidly spread around the world, and Meerzoeff built the first Russian
   refinery in the mature oil fields at Baku in 1861. At that time Baku
   produced about 90% of the world's oil. The battle of Stalingrad was
   fought over Baku (now the capital of the Azerbaijan Republic).
   Oil field in California, 1938. The first modern oil well was drilled in
   1848 by Russian engineer F.N. Semyonov, on the Aspheron Peninsula
   north-east of Baku.
   Oil field in California, 1938. The first modern oil well was drilled in
   1848 by Russian engineer F.N. Semyonov, on the Aspheron Peninsula
   north-east of Baku.

   The first commercial oil well drilled in North America was in Oil
   Springs, Ontario, Canada in 1858, dug by James Miller Williams. The
   American petroleum industry began with Edwin Drake's drilling of a
   69-foot-deep oil well in 1859, on Oil Creek near Titusville,
   Pennsylvania, for the Seneca Oil Company (originally yielding 25
   barrels a day, by the end of the year output was at the rate of 15
   barrels). The industry grew slowly in the 1800s, driven by the demand
   for kerosene and oil lamps. It became a major national concern in the
   early part of the 20th century; the introduction of the internal
   combustion engine provided a demand that has largely sustained the
   industry to this day. Early "local" finds like those in Pennsylvania
   and Ontario were quickly exhausted, leading to "oil booms" in Texas,
   Oklahoma, and California.

   Early production of crude petroleum in the United States:
     * 1859: 2,000 barrels
     * 1869: 4,215,000 barrels
     * 1879: 19,914,146 barrels
     * 1889: 35,163,513 barrels
     * 1899: 57,084,428 barrels
     * 1906: 126,493,936 barrels

   By 1910, significant oil fields had been discovered in Canada
   (specifically, in the province of Alberta), the Dutch East Indies
   (1885, in Sumatra), Persia (1908, in Masjed Soleiman), Peru, Venezuela,
   and Mexico, and were being developed at an industrial level.

   Even until the mid- 1950s, coal was still the world's foremost fuel,
   but oil quickly took over. Following the 1973 energy crisis and the
   1979 energy crisis, there was significant media coverage of oil supply
   levels. This brought to light the concern that oil is a limited
   resource that will eventually run out, at least as an economically
   viable energy source. At the time, the most common and popular
   predictions were always quite dire, and when they did not come true,
   many dismissed all such discussion. The future of petroleum as a fuel
   remains somewhat controversial. USA Today news (2004) reports that
   there are 40 years of petroleum left in the ground. Some would argue
   that because the total amount of petroleum is finite, the dire
   predictions of the 1970s have merely been postponed. Others argue that
   technology will continue to allow for the production of cheap
   hydrocarbons and that the earth has vast sources of unconventional
   petroleum reserves in the form of tar sands, bitumen fields and oil
   shale that will allow for petroleum use to continue in the future, with
   both the Canadian tar sands and United States shale oil deposits
   representing potential reserves matching existing liquid petroleum
   deposits worldwide.

   Today, about 90% of vehicular fuel needs are met by oil. Petroleum also
   makes up 40% of total energy consumption in the United States, but is
   responsible for only 2% of electricity generation. Petroleum's worth as
   a portable, dense energy source powering the vast majority of vehicles
   and as the base of many industrial chemicals makes it one of the
   world's most important commodities. Access to it was a major factor in
   several military conflicts, including World War I, World War II and the
   Persian Gulf War. The top three oil producing countries are Saudi
   Arabia, Russia, and the United States. About 80% of the world's readily
   accessible reserves are located in the Middle East, with 62.5% coming
   from the Arab 5: Saudi Arabia (12.5%), UAE, Iraq, Qatar and Kuwait.
   However, with today's oil prices, Venezuela has larger reserves than
   Saudi Arabia due to nonconventional crude reserves derived from
   bitumen.

Petroleum in Military Strategy

     * In World War II the Soviet Union sought to protect their oil fields
       from falling into the hands of Nazi Germany at the Battle of
       Stalingrad.
     * Many countries have a strategic oil reserve in the event of war or
       loss of oil supplies.
     * During the Iran-Iraq War many nations sent military ships to escort
       tankers carrying oil.
     * During the Gulf War, Iraq's retreating troops burned Kuwait's oil
       fields in order to give them air cover, to slow the advance of
       pursuing coalition forces, and to damage the Kuwaiti economy.
     * During the Iraq War the United States had military units work to
       quickly secure oil fields and remove boobytraps. It also had units
       guarding the Ministry of Petroleum in Baghdad.

Uses

   After petroleum has been distilled, the resulting hydrocabons may be
   used for a variety of purposes:
     * Gasoline
     * Petroleum jelly
     * Plastics
     * Fuel oil
     * Jet fuel
     * Kerosene

Production, consumption and alternatives

   The term alternative propulsion or "alternative methods of propulsion"
   includes both:
     * alternative fuels used in standard or modified internal combustion
       engines (i.e. combustion hydrogen).
     * propulsion systems not based on internal combustion, such as those
       based on electricity (for example, electric or hybrid vehicles),
       compressed air, or fuel cells (i.e. hydrogen fuel cells).

   Nowadays, cars can be classified between the next main groups:
     * Pampetro cars, this is, only uses petroleum.
     * Hybrid vehicle, that uses petroleum and other source, generally,
       electricity.
     * Petrofree car, that do not use petroleum, like 100 % electric cars,
       hydrogen vehicles...

   See also: renewable energy, greenhouse gas, climate change.

   2004 U.S. government predictions for oil production other than in OPEC
   and the former Soviet Union

   World energy consumption, 1970-2025. Source: International Energy
   Outlook 2004.

   World energy consumption, 1980-2030. Source: International Energy
   Outlook 2006.

Environmental effects

   Global fossil carbon emissions, an indicator of consumption, for
   1800-2000. Total is black. Oil is in blue.
   Enlarge
   Global fossil carbon emissions, an indicator of consumption, for
   1800-2000. Total is black. Oil is in blue.

   The presence of oil has significant social and environmental impacts,
   from accidents and routine activities such as seismic exploration,
   drilling, and generation of polluting wastes. Oil extraction is costly
   and sometimes environmentally damaging, although Dr. John Hunt of the
   Woods Hole Oceanographic Institution pointed out in a 1981 paper that
   over 70% of the reserves in the world are associated with visible
   macroseepages, and many oil fields are found due to natural leaks.
   Offshore exploration and extraction of oil disturbs the surrounding
   marine environment. Extraction may involve dredging, which stirs up the
   seabed, killing the sea plants that marine creatures need to survive.
   Crude oil and refined fuel spills from tanker ship accidents have
   damaged fragile ecosystems in Alaska, the Galapagos Islands, Spain, and
   many other places.

   Burning oil releases carbon dioxide into the atmosphere, which
   contributes to global warming. Per energy unit, oil produces less CO[2]
   than coal, but more than natural gas. However, oil's unique role as a
   transportation fuel makes reducing its CO[2] emissions a particularly
   thorny problem; amelioration strategies such as carbon sequestering are
   generally geared for large power plants, not individual vehicles.

   Renewable energy alternatives do exist, although the degree to which
   they can replace petroleum and the possible environmental damage they
   may cause are uncertain and controversial. Sun, wind, geothermal, and
   other renewable electricity sources cannot directly replace high energy
   density liquid petroleum for transportation use; instead automobiles
   and other equipment must be altered to allow using electricity (in
   batteries) or hydrogen (via fuel cells or internal combustion) which
   can be produced from renewable sources. Other options include using
   biomass-origin liquid fuels (ethanol, biodiesel). Any combination of
   solutions to replace petroleum as a liquid transportation fuel will be
   a very large undertaking.

Future of oil

   The Hubbert peak theory, also known as peak oil, is a theory concerning
   the long-term rate of production of conventional oil and other fossil
   fuels. It assumes that oil reserves are not replenishable (i.e. that
   abiogenic replenishment, if it exists at all, is negligible), and
   predicts that future world oil production must inevitably reach a peak
   and then decline as these reserves are exhausted. Controversy surrounds
   the theory, as predictions for when the global peak will actually take
   place are highly dependent on the past production and discovery data
   used in the calculation.

   Proponents of peak oil theory also refer as an example of their theory,
   that when any given oil well produces oil in similar volumes to the
   amount of water used to obtain the oil, it tends to produce less oil
   afterwards, leading to the relatively quick exhaustion and/or
   commercial unviability of the well in question.

   The issue can be considered from the point of view of individual
   regions or of the world as a whole. Hubbert's prediction for when US
   oil production would peak turned out to be correct, and after this
   occurred in 1971 - causing the US to lose its excess production
   capacity - OPEC was finally able to manipulate oil prices, which led to
   the oil crisis in 1973. Since then, most other countries have also
   peaked: Scotland's North Sea, for example in the late 1990s. China has
   confirmed that two of its largest producing regions are in decline, and
   Mexico's national oil company, Pemex, has announced that Cantarell
   Field, one of the world's largest offshore fields, is expected to peak
   in 2006, and then decline 14% per annum.

   For various reasons (perhaps most importantly the lack of transparency
   in accounting of global oil reserves), it is difficult to predict the
   oil peak in any given region. Based on available production data,
   proponents have previously (and incorrectly) predicted the peak for the
   world to be in years 1989, 1995, or 1995-2000. However these
   predictions date from before the recession of the early 1980s, and the
   consequent reduction in global consumption, the effect of which was to
   delay the date of any peak by several years. A new prediction by
   Goldman Sachs picks 2007 for oil and some time later for natural gas.
   Just as the 1971 U.S. peak in oil production was only clearly
   recognized after the fact, a peak in world production will be difficult
   to discern until production clearly drops off.

   One signal is that 2005 saw a dramatic fall in announced new oil
   projects coming to production from 2008 onwards. Since it takes on
   average four to six years for a new project to start producing oil, in
   order to avoid the peak, these new projects would have to not only make
   up for the depletion of current fields, but increase total production
   annually to meet increasing demand. 2005 also saw substantial increases
   in oil prices due to temporary circumstances, which then failed to be
   controlled by increasing production. The inability to increase
   production in the short term, indicating a general lack of spare
   capacity, and the corresponding uncontrolled price fluctuations, can be
   interpreted as a sign that peak oil has occurred or is presently in the
   process of occurring.

   According abiogenic theory, hydrocarbons (oil and gas) are abundant
   resource in the planet earth because petroleum is not a fossil fuel.

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 ( API gravity) or viscosity (" light", "intermediate"
   or " heavy"); refiners may also refer to it as " sweet," which means it
   contains relatively little sulfur, or as " sour," which means it
   contains substantial amounts of sulfur and requires more refining in
   order to meet current product specifications. Each crude oil has unique
   molecular characteristics which are understood by the use of crude oil
   assay analysis in petroleum laboratories.

   The barrels used for reference throughout the world are as follows:
     * Brent Crude, comprising 15 oils from fields in the Brent and Ninian
       systems in the East Shetland Basin of the North Sea. The oil is
       landed at Sullom Voe terminal in the Shetlands. Oil production from
       Europe, Africa and Middle Eastern oil flowing West tends to be
       priced off the price of this oil, which forms a benchmark.
     * West Texas Intermediate (WTI) for North American oil.
     * Dubai, used as benchmark for Middle East oil flowing to the Asia-
       Pacific region.
     * Tapis (from Malaysia, used as a reference for light Far East oil)
     * Minas (from Indonesia, used as a reference for heavy Far East oil)
     * Until June 15, 2005, the OPEC basket (a weighted average of oil
       prices) was comprised of be the average price of the following
       blends:
          + Arab Light (from Saudi Arabia)
          + Bonny Light (from Nigeria)
          + Fateh (from Dubai)
          + Isthmus (from Mexico, a non-OPEC country)
          + Minas (from Indonesia)
          + Saharan Blend (from Algeria)
          + Tia Juana Light (from Venezuela)

   In June 15, 2005 the OPEC basket was changed to reflect the
   characteristics of the oil produced by OPEC members. The new OPEC
   Reference Basket (ORB) is made up of the following:
     *
          + Saharan Blend (from [[Algeria])
          + Minas (from Indonesia)
          + Iran Heavy (from Islamic Republic of Iran)
          + Basra Light (from Iraq)
          + Kuwait Export (from Kuwait)
          + Es Sider (from Libya)
          + Bonny Light (from Nigeria)
          + Qatar Marine (from Qatar)
          + Arab Light (from Saudi Arabia)
          + Murban (from UAE)
          + BCF 17 (from Venezuela)

   OPEC attempts to keep the price of the Opec Basket between upper and
   lower limits, by increasing and decreasing production. This makes the
   measure important for market analysts. The OPEC Basket, including a mix
   of light and heavy crudes, is heavier than both Brent and WTI.

Pricing

   Overnight gas price hike shown at a Chicago area BP-Amoco station
   (background). The Shell station (foreground) has not yet posted the 12
   cent price hike.
   Enlarge
   Overnight gas price hike shown at a Chicago area BP-Amoco station
   (background). The Shell station (foreground) has not yet posted the 12
   cent price hike.
   Short-Term Oil Prices, 2004-2006 (not adjusted for inflation).
   Enlarge
   Short-Term Oil Prices, 2004-2006 (not adjusted for inflation).
   Medium-Term Oil Prices, 1994-2006 (not adjusted for inflation).
   Enlarge
   Medium-Term Oil Prices, 1994-2006 (not adjusted for inflation).
   Long-Term Oil Prices, 1861-2006 (top line adjusted for inflation).
   Enlarge
   Long-Term Oil Prices, 1861-2006 (top line adjusted for inflation).

   References to the oil prices are usually either references to the spot
   price of either WTI/Light Crude as traded on New York Mercantile
   Exchange (NYMEX) for delivery in Cushing, Oklahoma; or the price of
   Brent as traded on the Intercontinental Exchange (ICE, which the
   International Petroleum Exchange has been incorporated into) for
   delivery at Sullom Voe. The price of a barrel (which is 42 gallons) of
   oil is highly dependent on both its grade (which is determined by
   factors such as its specific gravity or API and its sulphur content)
   and location. The vast majority of oil will not be traded on an
   exchange but on an over-the-counter basis, typically with reference to
   a marker crude oil grade that is typically quoted via pricing agencies
   such as Argus Media Ltd and Platts. For example in Europe a particular
   grade of oil, say Fulmar, might be sold at a price of "Brent plus
   US$0.25/barrel" or as an intra-company transaction. IPE claim that 65%
   of traded oil is priced off their Brent benchmarks. Other important
   benchmarks include Dubai, Tapis, and the OPEC basket. The Energy
   Information Administration (EIA) uses the Imported Refiner Acquisition
   Cost, the weighted average cost of all oil imported into the US as
   their "world oil price".

   It is often claimed that OPEC sets the oil price and the true cost of a
   barrel of oil is around $2, which is equivalent to the cost of
   extraction of a barrel in the Middle East. These estimates of costs
   ignore the cost of finding and developing oil reserves. Furthermore the
   important cost as far as price is concerned, is not the price of the
   cheapest barrel but the cost of producing the marginal barrel. By
   limiting production OPEC has caused more expensive areas of production
   such as the North Sea to be developed before the Middle East has been
   exhausted. OPEC's power is also often overstated. Investing in spare
   capacity is expensive and the low oil price environment in the late 90s
   led to cutbacks in investment. This has meant during the oil price
   rally seen between 2003-2005, OPEC's spare capacity has not been
   sufficient to stabilise prices.

   Oil demand is highly dependent on global macroeconomic conditions, so
   this is also an important determinant of price. Some economists claim
   that high oil prices have a large negative impact on the global growth.
   This means that the relationship between the oil price and global
   growth is not particularly stable although a high oil price is often
   thought of as being a late cycle phenomenon.

   A recent low point was reached in January 1999, after increased oil
   production from Iraq coincided with the Asian financial crisis, which
   reduced demand. The prices then rapidly increased, more than doubling
   by September 2000, then fell until the end of 2001 before steadily
   increasing, reaching US $40 to US $50 per barrel by September 2004. In
   October 2004, light crude futures contracts on the NYMEX for November
   delivery exceeded US $53 per barrel and for December delivery exceeded
   US $55 per barrel. Crude oil prices surged to a record high above $60 a
   barrel in June 2005, sustaining a rally built on strong demand for
   gasoline and diesel and on concerns about refiners' ability to keep up.
   This trend continued into early August 2005, as NYMEX crude oil futures
   contracts surged past the $65 mark as consumers kept up the demand for
   gasoline despite its high price. (see Oil price increases of
   2004-2006).)

   Individuals can now trade crude oil through online trading sites margin
   account or their banks through structured products indexed on the
   Commodities markets.

   See also History and Analysis of Crude Oil Prices, asymmetric price
   transmission, and Crude oil price Benchmarks

Top petroleum-producing countries

   Source: Energy Statistics from the U.S. Government.

   For oil reserves by country, see Oil reserves by country.
   Oil producing countries
   Enlarge
   Oil producing countries
   Oil exports by country
   Enlarge
   Oil exports by country
   Oil imports by country
   Enlarge
   Oil imports by country

   In order of amount produced in 2004 in MMbbl/d (millions of barrels per
   day):
    1. Saudi Arabia ( OPEC)         10.37
    2. Russia                        9.27
    3. United States ^1              8.69
    4. Iran (OPEC)                   4.09
    5. Mexico ^1                     3.83
    6. China ^1                      3.62
    7. Norway ^1                     3.18
    8. Canada ^1,3                   3.14
    9. Venezuela (OPEC) ^1           2.86
   10. United Arab Emirates (OPEC)   2.76
   11. Kuwait (OPEC)                 2.51
   12. Nigeria (OPEC)                2.51
   13. United Kingdom (Scotland) ^1  2.08
   14. Iraq (OPEC) ^2                2.03

   ^1 peak production of conventional oil already passed in this state

   ^2 Though still a member, Iraq has not been included in production
   figures since 1998

   ^3 Canada has the world's second largest oil reserves when tar sands
   are included, and is the leading source of U.S. imports, averaging 1.7
   MMbbl/d in April 2006 .

Top petroleum-exporting countries

   In order of amount exported in 2003:
    1. Saudi Arabia (OPEC)
    2. Russia
    3. Norway ^1
    4. Iran (OPEC)
    5. United Arab Emirates (OPEC)
    6. Venezuela (OPEC) ^1
    7. Kuwait (OPEC)
    8. Nigeria (OPEC)
    9. Mexico ^1
   10. Algeria (OPEC)
   11. Libya (OPEC) ^1

   ^1 peak production already passed in this state

   Note that the USA consumes almost all of its own production, while the
   UK has recently become a net-importer rather than net-exporter.

   Total world production/consumption (as of 2005) is approximately 84
   million barrels per day.

   See also: Organization of Petroleum Exporting Countries.
   Retrieved from " http://en.wikipedia.org/wiki/Petroleum"
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   with only minor checks and changes (see www.wikipedia.org for details
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