If you are interested in knowing about one of the most commonly used commodity called crude oil, you are on the right page. There is a lot to know about this commodity, such as its global use, trading decisions and origins. Let’s take a look at some of the important facts.
1) It Is A Natural Resource
Basically, crude oil is a naturally occurring product, which consists of a little bit of sulfur, oxygen, nitrogen and more of hydrocarbons. It gets formed from what is left of small animals and plants under the surface of earth after millions of years. Many natural factors like pressure and heat turn the remains into oil.
Based on the type of oil and the method of extraction, you can classify it into heavy, extra heavy, medium or light.
2) Crude Oil Is Used In Production Processes
Crude oil is on the list of most important sources of energy on the planet. It is burnt to produce heat as a fuel. Aside from this, it’s used in asphalt, lubricants, waxes and many other petrochemicals. Afterwards, these products are used and made into other products like clothes and plastics.
It’s amazing to know that everything we see around us relies on crude oil during the production process.
3) 5 Countries Produce 50% Of The Oil Used Across The Globe
In 2017, Saudi Arabia, the USA, Iran, Russia and Canada produced around 46 million out of 92 million barrels of oil. The rest of oil is produced by other countries of the world.
The price of this product is affected by a lot of factors, such as political uncertainty and weather. For instance, in severe weather, it’s not possible to extract oil from the ground, which may result in the shortage of the product. As a result, the prices go up. Therefore, experts take these factors into account to make sure there is no shortage of oil.
4) Daily Consumption
The width, length and depth of an Olympic size pool is 25 meters, 50 meters and 2 meters respectively. To fill up one such pool, it can take as many as 1577 barrels of crude oil. You will be amazed to know that this the amount of oil consumed in the world in two minutes.
Now, if traders come to know that the usage of oil is going up, it gives them the indication that the demand for the commodity is going to go up. So, crude oil is considered an indicator of the economic health of the world. In a strong economy, the usage of oil keeps on rising.
5) Daily Consumption In The USA
In the USA, the daily import of oil is 8 million barrels. While the USA is on top of the list as far as oil production is concerned, it still imports around 8 million barrels on a daily basis. There are two reasons behind it. First, the consumption of oil in the USA is relatively higher than other countries. Secondly, not all of the oil the country produce is up to the mark.