Some people arbitrarily speak about oil as if it is a single, indistinguishably homogenous substance without any unique differentiation but this is actually not the case at all! In fact, there are many different kinds of oil. Words: 1007
The comments above & below are edited ([ ]) and abridged (…) excerpts from the original article at oilprice.com
In its natural, unrefined state, crude oil ranges in density and consistency, from very thin, light weight and volatile fluidity to an extremely thick, semi-solid heavy weight oil. There is also a tremendous gradation in the color that the oil extracted from the ground exhibits, ranging all the way from a light, golden yellow to the very deepest, darkest black imaginable.
For the purpose of having a set, agreed upon “vocabulary,” the petroleum industry often uses references to “Geographical Locations” in order to descriptively classify crude oils due to the fact that oil from different geographical locations will naturally have its own very unique properties. These oils vary dramatically from one another when it comes to their viscosity, volatility and toxicity.
– relates to the oil’s resistance to flow – higher viscosity crude oil is much more difficult to pump from the ground, transport and refine.
– describes how quickly the oil evaporates into the air. Oils that are naturally highly volatile need additional effort to ensure that temperature regulation and sealing procedures loose as little oil as possible.
– refers to how poisonous the oil and its refining processes are to local life, from humans, to flora and fauna as well as other environmentally fragile living entities and organisms. If an oil spill were to occur, each type of oil presents quite unique “clean up” challenges, procedures and priorities.
The four primary types of oil are:
1. Very Light Oils / Light Distillates
– Includes jet fuel, gasoline, kerosene, light virgin naphtha, heavy virgin naphtha, petroleum ether, petroleum spirit, and petroleum naphtha. These oils tend to be highly volatile and can evaporate within just a couple of days, which quickly diffuses and decreases toxicity levels.
2. Light Oils / Middle Distillates
– Includes most Grade 1 and Grade 2 fuel oils and diesel fuel oils as well as most domestic fuels and light crude marine gas oils. These oils are moderately volatile, less evaporative and moderately toxic.
3. Medium Oils
Most of the crude oil on the market these days falls into this particular category. Low volatility makes for messier and more complex “clean ups”.
4. Heavy Fuel Oils
– Includes the heavy crude oils, Grade 3,4,5 and 6 fuel oils (Bunker B & C) as well as intermediate and heavy marine fuels. These oils have very slow and little evaporation and therefore toxicity is highly increased. This not only means potentially severe contamination for fish, fowl and fur-bearing creatures, but possible “long term” contamination of water and soil as well.
There are over 160 different oils traded on the market theses days, but for simplicity’s sake, let’s discuss the three primary oils that get most of the serious attention in the news and in the markets.
The three primary oils are:
1. West Texas Intermediate Crude (WTIC)
– an extremely high quality crude oil which is greatly valued for the fact that it is of such premium quality, more and better gasoline can be refined from a single barrel than from most other types of oil available on the market.
The WTIC “API Gravity” is 39.6 degrees, which makes it a “light” crude oil, with only 0.24 percent sulfur, which makes it a “sweet” crude oil. The term “API Gravity” refers to the “American Petroleum Institute Gravity, which is a measure that compares how light or heavy a crude oil is in relation to water. If an oils “API Gravity” is greater than 10 then it is lighter than water and will float on it. If an oils “API Gravity” is less than 10, it is heavier than water and will sinks.
These combined qualities as well as location make WTIC a prime crude oil to be refined in the United States. The vast majority of WTIC oils are refined in the Midwest and Gulf Coast regions. Even with production of WTIC oil in decline, WTIC is often priced from $5 to $7 higher per barrel than “OPEC Basket” oil and on average, $1 to $2 higher per barrel than “Brent Blend” oils.
2. Brent Blend
– a combination of different oils from 15 fields throughout the Scottish Brent and Ninian systems located in the North Sea.
The Brent Blend “API Gravity” is 38.3 degrees, which makes it a “light” crude oil, but clearly not quite as “light” as WTIC. It also contains about 0.37 percent sulfur, which makes it a “sweet” crude oil, but then again, not quite as “sweet” than WTIC.
Brent Blend is excellent for making gasoline and middle distillates, both of which are utilized in large quantities in Northwest Europe, where Brent blend crude oil is most often refined. Brent Blend production, much like that of WTIC, is also on the decline, but it remains a major benchmark for other crude oils in Europe or Africa. Brent Blend is often priced at a $4 higher per barrel compared to the OPEC Basket price.
3. OPEC Basket
– a collective of seven different crude oils from Algeria, Saudi Arabia, Indonesia, Nigeria, Dubai’, Venezuela and the Mexican Isthmus. The acronym OPEC stands for “Organization of Petroleum-Exporting Countries” which is an organization that was formed in 1960 in order to create some common policy for the production and sale of oil within its jurisdiction.
Because OPEC oil has a much higher percentage of sulfur within its natural make-up and therefore is not nearly as “sweet” as WTI or even Brent Blend and since it is also not naturally as “light” as well, the prices of OPEC oil are normally consistently lower than either Brent Blend or WTI. Nevertheless, OPEC’s willingness or ability to quickly increase production when necessary makes OPEC a consistent “Major Player” in the oil industry.
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