Crude Oil
Crude oil is a natural liquid petroleum product made up of hydrocarbon deposits and organic materials that originated from animals and plants that existed millions of years ago. These organisms were covered by layers of sand, silt, and rock, which subjected them to heat and pressure, resulting in a kind of fossil fuel that is refined into various useful products, such as gasoline, diesel, liquefied petroleum gases, and feedstock for the petrochemical industry. However, crude oil is a non-renewable resource, which means that it cannot be replaced naturally at the rate we consume it and is, therefore, a limited resource.
KEY TAKEAWAYS
Crude oil is a fossil fuel extracted from the earth and refined into products like gasoline. It’s a significant commodity traded globally and the primary source of energy production.
Brent Oil
Brent Blend is a well-known type of crude oil that serves as a benchmark for determining crude oil prices. It is a light, sweet crude oil that comes from the North Sea. As more than half of the world’s crude oil is traded internationally, Brent Blend is a logical choice for setting the standard for crude oil pricing. Brent Blend is also known as North Sea Brent Crude and London Brent, or simply as Brent oil.
KEY TAKEAWAYS
Brent, an oil blend extracted from the North Sea in the 1960s, is a standard used to evaluate the prices of crude oil. It is a light and sweet blend, which can be easily refined into petrol and other related products.
Natural Gas
The use of Natural Gas dates back to Ancient China, where crude pipelines made of bamboo shoots were used to transport it from above ground around 500 BC. In the 18th century, commercialization led to the use of Natural Gas for lighting houses and streetlights in Britain. The first manufactured gas in the US was produced in 1816, and in 1885, the invention of the Bunsen burner made cooking and heating more efficient.
As of 2009, 8% of the estimated remaining recoverable reserves of Natural Gas, which is a traded commodity, had been used. While Natural Gas prices have historically been volatile due to various factors, such as oversupply, storage increases, and changing demand patterns, since 2010, the price has remained below $4.00 per Metric Million British Thermal Unit (MMBtu). The chart below shows significant price movements in the 21st century and the reasons behind them.
WHO ARE THE BIGGEST NATURAL GAS PRODUCERS?
The top 10 Natural Gas producers possess almost 80% of the world’s reserves of this fossil fuel. As of 2018 data, these regions – along with their average annual outputs (measured in billions of cubic meters) – are:
- United States – 766.2
- Russia – 598.6
- Iran – 184.8
- Qatar – 164
- Canada – 149.9
- China – 138.4
- European Union – 118.2
- Norway – 117.2
- Saudi Arabia – 102.3
- • Indonesia – 86.9
