3. History of Oil:- The first commercial oil well drilled in Romania in 1857. The Indian petroleum industry is also one of the oldest in the world, with Oil being struck at Makum near Margherita in Assam in 1867. In 1889 in Digboi in Assam first oil was struck by Burma oil company. At the beginning of the 20th century oil supplied only 4% of the world’s energy but know it has become the most important energy source and supplies about 37% of the world’s energy. Since the shift from coal to oil, the world has consumed over 875 billion barrels. Another 1,000 billion barrels of proved and probable reserves remains to be recovered.
4. Components of Oil:- The exact molecular composition varies widely from formation to formation but the proportion of chemical elements vary over fairly narrow limits as follows: Carbon -- 83-87% Hydrogen --10-14% Nitrogen--0.1-2% Oxygen--0.1-1.5% Sulfur--0.5-6% Metals-- <1000ppm
5. Classification:- The petroleum industry generally classifies crude oil by:- The geographic location it is produced in. Its API gravity. By its sulfur content. 1. According, to the geographic location some of the types are Brent crude, WTI (West Texas Intermediate) crude etc. The geographic location is important because it affects transportation costs to the refinery.
6. 2. API ( American Petroleum Institute) Gravity:-A specific gravity scale developed by the American Petroleum Institute (API) for measuring the relative density of various petroleum liquids, expressed in degrees. It is given by:- API Gravity = 141.5/ specific gravity – 131.5 Eg:- API of water = 10. (Because S.G. of water=1). API values of some other crude oils are:- Crude from Bombay High 35-38 Gulf 25-28 Venezuela 15
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8. Technical factors affecting Crude oil prices Hedging:- A hedge is a position established in one market in an attempt to offset exposure to price fluctuations. So, we can mitigate the risk of crude oil price fluctuations by hedging it.