What is Crude Oil and How is it Measured?
Crude oil is a hydrocarbon mixture that exists in a liquid phase in underground reservoirs. It is classified as light, medium or heavy. The weight or gravity is measured on the American Petroleum Institute gravity scale.
The American Petroleum Institute gravity, or API gravity, is a measure of how heavy or light a petroleum liquid is compared to water. The lighter or less dense the oil is the higher its api gravity will be. Typically the higher api gravity oil has more value.
Crude oil consists of mostly hydrocarbons but has up to 200 different organic compounds in it. Different combinations and concentrations of these 200 or so compounds are found in crude oil. The composition of crude oil varies from different formations and fields. It’s not a uniform material. Chemical engineers who run refineries closely monitor the differences in composition. Complex analysis of the physical and chemical aspects of the crude oil are undertaken to determine its quality.
Refiners are much more interested in the composition of the crude oil rather than its api gravity. They are most interested in the composition that will yield the highest output of high octane gasoline and diesel fuel. Refiners prefer light, sweet crude oil because of its low sulfur content and relatively high yields of high value products such as gasoline, diesel fuel, heating oil and jet fuel. Sour crude oil is heavier and has a higher sulfur content. The heavier and more sour the crude, the harder and more expensive it is to turn into refined products.
The price of oil everyone hears about daily is the price of a light, sweet grade of crude oil.There has been a dramatic increase in the price of light, sweet crude because of a decrease in supply. The higher quality crude oil supplies get used up first so most refiners are working with a lower quality product. Over the last five years the average api gravity of non-OPEC oil production has decreased (heavier less valuable oil) and the sulfur content has increased (more sour, more expensive to refine). While supply of light, sweet crude has gone down, the demand has gone up. Oil companies like Western Pipeline Corporation are always looking for the highest quality oil to drill for.
Environmental concerns regarding the increased use of sour crude oil with its higher sulfur content is being addressed by countries around the world. The US and many other countries are implementing regulations to reduce fuel sulfur content. The easiest way for oil companies to meet these regulations is to start with a lighter, sweeter crude. These regulations will reduce the yield of gasoline and diesel per barrel of crude oil.
Bob Jent is the CEO of Western Pipeline Corporation. Western Pipeline Corp specializes in identifying, acquiring and developing existing, producing reserves on behalf of its individual clients.
Article Source: ArticlesBase.com - What is Crude Oil and How is it Measured?