Chemistry Reference
In-Depth Information
CHAPTER 5
Petrochemicals
5.1 CRUDE OIL
Crude oil comes from beneath the ground and is sold by the barrel. A barrel
of oil is 42 gallons, so if oil costs $95 per barrel it costs $2.26 per gallon. Oil
is traded on the open market and the price varies somewhat based upon the
source of the oil. One common benchmark price is the price of Brent crude
oil. Brent crude oil comes from the North Sea. Other oils, for example Dubai
crude, may be priced somewhat higher or lower but generally the prices are
similar. WTI oil stands for West Texas Intermediate. Crude oils can be light or
heavy depending on their density. This should not be confused with the terms
“lights” or “heavies”, which refer to the fractions when oil is distilled in the
refining process. The different oils have somewhat different compositions that
can make them more or less desirable for gasoline production. Oil can vary
in the composition of the distillates, having varying amounts of the different
fractions, and can vary in the amount of sulfur. Oil that has less than 0.5% by
weight sulfur is called “sweet”. Oil with higher amounts of sulfur is called
“sour.”
For many different reasons, including demand, government regulation, and
geopolitics, the price can vary remarkably. From 1988 to 2003 the price of a
barrel of Brent crude varied from as low as about $10 per barrel to as high as
about $35 per barrel. In 2004 the price started to climb and was at an all-time
high of about $146 in the middle of 2008. From there, prices started to fall and
were down to about $40 by the end of 2008. At that point they again started
to rise. From January 2011 through January 2014, the price stayed between
$90 and about $125 and averaged around $110 per barrel.
These same factors influence the spread among the different sources of
oil. For example, in the last several years, the price spread between WTI and
Brent crude has varied. In 2012, there was some concern about the European
financial system and political unrest in the Mid-East. During this time,
Search WWH ::
Custom Search