Everyone has heard of it, and almost everyone has used it at one time or another in some form, but not many people actually know what it is. Crude oil is the name for oil that comes directly out of the ground. It is also known as unprocessed oil, or petroleum.
What Is Crude Oil?
Unprocessed oil is a fossil fuel, meaning that it was naturally formed out of decaying plant and animal life, which once flourished in the oceans millions of years ago. It is usually found where old sea beds were once present. Petroleum can vary in color, going from clear to black like tar. It also varies in viscosity, or texture. Crude can be almost like water, or it can be found in an almost solid form.
Products Derived From Petroleum
Crude oil is a very useful product. Since it contains hydrocarbons, it can be made into many different types of products which we all use on a regular basis. Hydrocarbons contain hydrogen and carbon, in various lengths and structures. These elements contain a lot of energy, so products like gasoline, diesel fuel, natural gas, kerosene, home heating oil and paraffin wax can capitalize on that energy. Even products ranging from combs, to panty hose, to petroleum jelly are all made from raw oil from the ground. It is actually easier to name products that aren’t produced as a result of unprocessed oil production. Lots of aromatic products and asphaltic products are also derived from it.
Current Crude Oil Market Trends
Although there are innumerable uses for it, the market is currently in a downward trend. Oil prices are dropping as global demand forecasts are being revised, and the market is being flooded with oil from Middle Eastern nations. Forecast had predicted a high demand for oil right across the board, but a sluggish economy from China all the way to Europe has proven these forecasts wrong. As they say on Wall Street, when all indicators are on one side of the boat, it usually tips over.
Saudi Arabia, the world’s largest producer of crude oil, is pumping more and more oil into an already saturated global market. Recently, North Sea oil prices dropped to an almost four year low. U.S. benchmark WTI also dropped to levels not seen since 2012. Overall, oil prices have been down approximately 25% since June, due to a booming supply and a slumping demand. The Saudis seem happy with the prices as they are now, so it is expected to get even lower. They have already signaled that they intend to keep production levels high, in spite of the decline in global prices per barrel.
Not all companies are suffering from this trend. Essentra, which provides top notch pipe protection products, such as oilfield thread protectors, may benefit from the increased oil production. More production means more pipes will be needed, along with more pipe protection. As one of the best in the pipe protection business, we look forward to working with new partners in the oil industry. Contact us today for all your pipe protection needs.