PHYSICO-CHEMICAL CHARACTERISATION OF CRUDE OIL Color: Color of crude oil is transmitted light varies from yellow to red. Here are some terms you should know when considering investing in crude oil: Crude oil benchmarks are the basis of an organized investment market in oil. A better understanding of the variations of crude oil will help when it comes to a discussion of benchmarks and investment goals. Although, Brent blend is graded as a light crude oil, it is not as light as WTI.Russian Export Blend, the Russian benchmark crude, is a mixture of several crude grades used domestically or sent for export. Hydrogen is another major component that makes up as much as 13% of crude oil. When looking at the company's financials, you should be able to identify an average rate of return on revenue and investment capital. Some of the other more common ones include: Brent and WTI serve as the basis for most of the oil prices in the U.S. and Europe, but there can be a significant discrepancy in value between different supplies of crude oil. Heavy crude oil is also known as “tar sands” because of its high bitumen content. Transporting crude to those refineries, via truck or pipeline, is another essential step in the process of selling petroleum products to end-users. More hydrogen as compared to carbon will produce a lighter oil. Specifically, the hydrocarbons in the oil have the greatest effect on its density. This measurement reflects how light or heavy a crude oil is compared to water. For larger extraction sites, ones that total between 100 and 1000 barrels per day, an automated measuring system is employed. Sour Crude Oil around the World If an oil’s API Gravity is greater than 10, it is lighter than water and will float on it. Figure 1 : Relationship between density and sulfur content of various Crude Oil Benchmarks quality types (OPEC, 2011)Crude Oil quality by types © Hassan Harraz 2016. In the case of crude oil, the materials put into the process are those that die and decay in place. J a n u a r y 1945. The processing of WTI also yields about one-third “residuum,” a residual by-product that must be either reprocessed or sold at a discount. Crude oil is not the end product but just the basic resource. Their odor is strong, and they evaporate quickly, emitting volatiles. All of the crude oil that gets extracted has value. The hydrocarbons in crude oil are further classified into three main types: naphthenes, paraffins and aromatics. “This is stunning as it basically says that a barrel of oil earlier this week was effectively cheaper than it was in 1870. The lighter the oil, the more of the desirable products it produces through distillation at a range of temperatures. We hear so much about the price of oil climbing on a daily basis and see the results at the gas pump that investing in crude oil seems like a no-brainer. These oils vary dramatically from one another when it comes to their viscosity, volatility, and toxicity. Have your oil & gas questions answered by industry experts. When you are satisfied that the company you plan to invest in is reliable, then you can turn to the particular property or project. Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. It is a risky business with a lot of upfront costs, but the benefit can be sizable. The hydrogen sulfide in sour crude is toxic and can be fatal with too much exposure. Secure .gov websites use HTTPS,,,41,538,2035,5196,5199,, Wilson Sons expands tugboat operations in Brazil’s Northern Arc Ports. Each of these classifications has a different weight and value. It is important to understand the variables involved in crude oil to make an intelligent investment. They also sink in water, adding the potential of smothering or drowning wildlife. The market for crude and its constituent products continues to grow worldwide while extraction technology improves, making oil drilling and refining more efficient. If an oil’s API gravity is greater than 10 (the gravity of water), it is lighter than water and will float on it. This field is for validation purposes and should be left unchanged. Understanding the market for the commodity you buy and the means of assigning value to individual units is necessary to evaluate an investment opportunity. By K. G. Margosohes (Member). ' Webinar – CTU Code –Why it is important- 18 Dec 2020. They also govern the means and ease of transport. Where you can: See recent prices of mineral and lease transactions. When refineries are offline or at capacity, you cannot access the true value of crude oil. A shake-out test is performed on a small sample of the oil. There can be huge rewards for oil companies that put their resources into oil exploration and development. The type of oil reserves recovered from nearby wells can serve as a benchmark for success on a new play. To precisely value crude oil, workers would need to test each barrel for various characteristics. For an aggressive investment, you may look at a new project or property. CLASSIFICATION OF CRUDE OILS. The key to any good investment, though, is valuation. Most oil companies focus on one aspect of the oil industry. Because of the constant potential of spills, the Environmental Protection Agency has classified crude oil in four categories that reflect how the oil would behave in spills and its aftermath: Class A: Because they are light and highly liquid, these clear and volatile oils can spread quickly on impervious surfaces and in water. At the highest distillation temperatures—over 1,000 degrees Fahrenheit—the heaviest products are produced, including residuum or residual fuel oil, which can be used for lubricants. When you compost, you have some control over the results by what you throw on the pile, how often you aerate and how long you wait. The API gravity scale divides crude oil into four categories: light, medium, heavy and extra heavy. Copyright © 2020 | | All Rights Reserved, Understanding Crude Oil Benchmarks and Classifications. After running it in the centrifuge and separating the heavier impurities, the oil gets measured for valuation. stream The combustion of oil with high sulfur contents results in higher levels of pollution, so sulfur is usually removed in the refining process. When it comes to crude oil investments, you are looking for a company that can find and produce a high-quality product on a regular basis. Tapis Crude (which is traded in Singapore), Bonny Light (used in Nigeria), Mexico’s Isthmus, and Maya. Crude oil is a more complex commodity than the stock reports would suggest. The different types of crude oil are classified based on the ... One of the largest and major Classifications of Crude oil is Brent Blend, which is found in the North Sea. <>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 595.32 842.04] /Contents 4 0 R/Group<>/Tabs/S/StructParents 0>> Demand is one factor that affects the crude oil market. Think of it this way, when cars were first built, the oil they required needed an API SA Service Classification. In the middle range of distillation temperatures, the refinery produces jet fuel, home heating oil, and diesel fuel. Here are three major types of oil industry firms. Liquid petroleum pumped from oil wells is called “crude” or “crude oil.” At the molecular level, crude oil is composed predominantly of carbon, which can make up as much of 87% of the material. Oils weighing in between 10 and 20 gravity are considered heavy. If you continue to use this site we will assume that you are happy with it. Crude oil with more than 0.5% sulfur is considered sour. Any decisions based upon the information contained in this web site are the sole responsibility of the user. Checking with their downstream should give you an objective vision of how well an oil company accomplishes its primary goal. %���� Mostly black or dark brown, Class D oils tend to dissolve and cover surfaces when they get hot, which makes them hard to clean up. Therefore, it is valued at a lower rate than sweet oil.