Pricing Of Crude Oil / Petroleum

By Author: shaniul alam
Total Articles: 3
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Until 1985, the pricing of crude oil was done by the OPEC (The Organization of the Petroleum Exporting Countries)- administrated pricing system. But with the collaps of this system in 1985, the oil exporting countries started to use a marked- linked pricing mechanism. PEMEX (Mexican state- own petroleum company) adopted it first in 1986 and it became widely accepted and the main method of pricing crude oil in international trade from 1988 until now.
The Price of Oil / petroleum as guoted in the media often refers to the price per barrel (159 liters) of either Brent, witch is traded on the International Exchange or light crude/WTI witch is traded on the New York Mercantile Excange(NYMEX).
There are especially three factors witch determins the price of a barrel of oil. The first is the oils specific gravity or API (The American Petroleum Institutes gravity measurment). The API determines how heavy or light crude oil/petroleum liguid is compared to water. The second factor is its sulfur content and for the third it is where its located.
As we can ...
... understand from above, the crude-oil-prices is depending on a lot of different factors wich in the end is determined by demand and shortage or oversupply from OPEC as well as the non -OPEC countries.
Look at the crude Oil Price graph and the crude oil price history chart below and see how the crude- oil-prices varies in value over time.
Some decades ago, the price of oil were really low, and people didn't ask themselves if they take advantage of the different materials gained from this natural element in a useful way or not. In the 60's, crude oil had a price of $2-5. The black gold meant the future of the industry. The machinery, weapons and chemical industry developed as fast as never before.
But today even everyday citizens and school kids are confronted with the question about how to use crude the best. They know, what kind of products can be gained from crude and for what can they be used. However, a lot of us live with that optimistic dream of using renewable energy someday, to protect and save our environment and the future of the planet. But all these people do not realise or do not want to know the fact that today's industry is actually based on this source of energy. A big factory or industrial plant could not even work with solar or wind energy, because we do not have that technology to gain such a great density of power as from oil or carbon. Just take a look in our life. Everybody has a car, a computer and heating. Without using crude we would never had this great amount of fuel and electrical power to use all our everyday gadgets. Just to consider this fact, the daily consumption of gasoline, alone in the United States, reaches almost the 20 millions barrels.