Can anyone explain how gas prices?

Question

Maybe I'm an idiot, but if a gas station pays X amount per gallon when they fill up their underground tanks, how can they raise the price the next day? Shouldn't the price be the same until that tankful is gone?

Answer 1

The price of gas changes all the time. Pouring fuel into a huge underground tank doesn't mean that its value freezes. Gas stations adjust their prices to try to reflect the ever-changing price of gas. When fuel prices go up, they raise their prices. When fuel prices go down, they lower their prices. They do this to stay in business.

If a gas station would not raise the price while real price of gas goes up, then that gas station would lose money. If a gas station would not lower the price when gas prices fall, then that gas station would lose customers.

Answer 2

"Saudis call for oil summit, say 'no justification' for price spike" today's yahoo headline. As delicate as the market is right now, any scare could trigger a price hike. I'd be curious to know how much the price of oil was in 2000 when the Bush Administration came into office. Clearly the war had a negative effect on oil prices because it put supply in potential jeopardy. The record profits made by all the major oil companies is just the result. Just so happened that it worked in these companies favor. I think that anyone in the white house should have no ties to BIG BUSINESS and be regulated to ensure that there are NO 'conflicts of interest'. But we know that will never happen. The only way to know if the bush administration was helping to keep the prices high, is to see if they fall drastically after they leave office. Or it could be just be another coincidence! LOL

Answer 3

Well, to stay in business they have to replace that gallon they just sold with new gas they will buy tomorrow - at a higher price.

In reality, they raise the price if they can (meaning if all the other stations are raising their prices). If other stations are lowering p[rices, they must lower theirs or lose some customers.

All this is regardless of the price they pay for gas.

When people graduate fromcollege, should they get paid a salary based upon how much they paid for college tuition? of course not. The price you sell something (in this case, yourself with a college degree) is based on what somebody wil pay for it.

Answer 4

Corey,
two issues are at work. One, prices are a rationing device. There's not a lot of beach front property so in order to sort out the have and have nots...prices determine these groups. Second, the gas station owners are, in fact, in the most vicious catagory of free market. it's called perfect competition. EVERY KNOWS every one elses prices. They are listed on the signs as we drive buy. They raise their prices because the amount they paid for what is in stock WILL NOT cover what they must buy at future precieved prices. In short, prices help ration a resource and not just gas.

Answer 5

NO!!!

They sell their gas based on what the expected price will be next time they fill up.

If you owned a shop, and bought gasoline at 3 dollars a gallon today. But, found out in two days to refill your tanks it would cost 3.10 a gallon. What would you sell your gas for?

Surely not $3. You will not have enough $ to refill your tanks.

Answer 6

If you pay $200,000 for your house, and then you sell it a year later, do you sell it for $200,000 or the $225,000 it is NOW WORTH.

The gasoline in the underground tank is now WORTH more (it is worth its replacement cost). Note: if the price of gasoline suddenly drops, it is worth less and the owner sells at a loss.

Answer 7

1) its summer, people use much more gas
2)we are at war
3)oil is running out!

Answer 8

Petroleum
From Wikipedia, the free encyclopedia
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Pumpjack pumping an oil well near Lubbock, Texas
Ignacy Łukasiewicz - inventor of the refining of kerosene from crude oil. Energy Portal
Petroleum (from Greek πετρα (petra) - rock + Greek ολιον) or crude oil is a naturally occurring liquid found in formations in the Earth consisting of a complex mixture of hydrocarbons (mostly alkanes) of various lengths. The approximate length range is C5H12 to C18H38. Any shorter hydrocarbons are considered natural gas or natural gas liquids, while longer hydrocarbon chains are more solid, and the longest chains are coal. In its naturally occurring form, it may contain other nonmetallic elements such as sulfur, oxygen, and nitrogen.[1] It is usually black or dark brown (although it may be yellowish or even greenish) but varies greatly in appearance, depending on its composition. Crude oil may also be found in semi-solid form mixed with sand, as in the Athabasca oil sands in Canada, where it may be referred to as crude bitumen.

Petroleum is used mostly, by volume, for producing fuel oil and gasoline (petrol), both important "primary energy" sources.[2] 84% (37 of 42 gallons in a typical barrel) of the hydrocarbons present in petroleum is converted into energy-rich fuels (petroleum-based fuels), including gasoline, diesel, jet, heating, and other fuel oils, and liquefied petroleum gas.[3]

Due to its high energy density, easy transportability and relative abundance, it has become the world's most important source of energy since the mid-1950s. Petroleum is also the raw material for many chemical products, including solvents, fertilizers, pesticides, and plastics; the 16% not used for energy production is converted into these other materials.

Petroleum is found in porous rock formations in the upper strata of some areas of the Earth's crust. Known reserves of petroleum are typically estimated at around 1.2 trillion barrels[4] with at least one estimate as high as 3.74 trillion barrels.[5] Consumption is currently around 84 million barrels per day, or 31 billion barrels per year. Because of reservoir engineering difficulties, recoverable oil reserves are significantly less than total oil-in-place. At current consumption levels, current known reserves would be gone in about 32 years, around 2039. However, this ignores any new discoveries, changes in demand, better technology, population growth, industrialization of third world countries, and other factors. While oil is expected to remain a major source of energy in coming years, alternative energy development such as solar power, wind power, butanol, ethanol, photovoltaic, nuclear power, hydrogen, or oil from oil shale, and oil sands may increase in significance. Coal may also increase in use because of its existence in vast quantities in rapidly developing countries, such as China and India, which are not yet bound by controls under the Kyoto Protocol

Contents [hide]
1 Formation
1.1 Chemistry
1.2 Biogenic theory
1.3 Abiogenic theory
2 Classification
3 Means of production
3.1 Extraction
3.2 Alternative methods
4 History
5 Uses
5.1 Fuels
5.2 Other derivatives
5.3 Alternatives to petroleum fuels (gasoline and diesel)
5.4 Consumption statistics
6 Environmental effects
7 Future of oil
8 Pricing
8.1 Price history
9 International market
9.1 Petroleum efficiency among countries
9.2 Top petroleum-producing countries
9.3 Top petroleum-exporting countries
9.4 Top petroleum-consuming countries
9.5 Top petroleum-importing countries
9.6 Top petroleum non-producing and consuming countries
10 Petroleum in the media
10.1 Books about the petroleum industry
10.2 Books about petroleum supply
10.3 Films about petroleum
10.4 Writers covering the petroleum industry
11 See also
12 References
13 External links
13.1 Articles
13.2 Data



[edit] Formation

[edit] Chemistry

Octane, a hydrocarbon found in petroleum, lines are single bonds, black spheres are carbon, white spheres are hydrogenThe chemical structure of petroleum is composed of hydrocarbon chains of different lengths. These different hydrocarbon chemicals are separated by distillation at an oil refinery to produce gasoline, jet fuel, kerosene, and other hydrocarbons. The general formula for these alkanes is CnH2n+2. For example 2,2,4-Trimethylpentane, widely used in gasoline, has a chemical formula of C8H18 which reacts with oxygen exothermically:[6]



Incomplete combustion of petroleum or gasoline results in emission of poisonous gases such as carbon monoxide and/or nitric oxide. For example:



Formation of petroleum occurs in a variety of mostly endothermic reactions in high temperature and/or pressure. For example, a kerogen may break down into hydrocarbons of different lengths.[7]


[edit] Biogenic theory
Most geologists view crude oil and natural gas as the product of compression and heating of ancient organic materials over geological time. According to this theory, oil is formed from the preserved remains of prehistoric zooplankton and algae which have been settled to the sea bottom in large quantities under anoxic conditions. Terrestrial plants, on the other hand, tend to form coal. Over geological time this organic matter, mixed with mud, is buried under heavy layers of sediment. The resulting high levels of heat and pressure cause the remains to metamorphose, first into a waxy material known as kerogen which is found in various oil shales around the world, and then with more heat into liquid and gaseous hydrocarbons in a process known as catagenesis. Because most hydrocarbons are lighter than rock or water, these sometimes migrate upward through adjacent rock layers until they become trapped beneath impermeable rocks, within porous rocks called reservoirs. Concentration of hydrocarbons in a trap forms an oil field, from which the liquid can be extracted by drilling and pumping. Geologists often refer to an "oil window" which is the temperature range that oil forms in—below the minimum temperature oil remains trapped in the form of kerogen, and above the maximum temperature the oil is converted to natural gas through the process of thermal cracking. Though this happens at different depths in different locations around the world, a 'typical' depth for the oil window might be 4–6 km. Note that even if oil is formed at extreme depths, it may be trapped at much shallower depths, even if it is not formed there (the Athabasca Oil Sands is one example). Three conditions must be present for oil reservoirs to form: first, a source rock rich in organic material buried deep enough for subterranean heat to cook it into oil; second, a porous and permeable reservoir rock for it to accumulate in; and last a cap rock (seal) that prevents it from escaping to the surface.

If an oil well were to run dry and be capped, it would likely fill back to its original supply eventually. There is considerable question about how long this would take. Some formations appear to have a regeneration time of decades. Majority opinion is that oil is being formed at less than 1% of the current consumption rate.[citation needed]

The vast majority of oil that has been produced by the earth has long ago escaped to the surface and been biodegraded by oil-eating bacteria. Oil companies are looking for the small fraction that has been trapped by this rare combination of circumstances. Oil sands are reservoirs of partially biodegraded oil still in the process of escaping, but contain so much migrating oil that, although most of it has escaped, vast amounts are still present - more than can be found in conventional oil reservoirs. On the other hand, oil shales are source rocks that have never been buried deep enough to convert their trapped kerogen into oil.

The reactions that produce oil and natural gas are often modeled as first order breakdown reactions, where kerogen is broken down to oil and natural gas by a set of parallel reactions, and oil eventually breaks down to natural gas by another set of reactions. The first set was originally patented in 1694 under British Crown Patent No. 330 covering,

"a way to extract and make great quantityes of pitch, tarr, and oyle out of a sort of stone."

The latter set is regularly used in petrochemical plants and oil refineries.


[edit] Abiogenic theory
Main article: Abiogenic petroleum origin
The idea of abiogenic petroleum origin was championed in the Western world by astronomer Thomas Gold based on thoughts from Russia, mainly on studies of Nikolai Kudryavtsev. The idea proposes that hydrocarbons of purely geological origin exist in the planet. Hydrocarbons are less dense than aqueous pore fluids, and are proposed to migrate upward through deep fracture networks. Thermophilic, rock-dwelling microbial life-forms are proposed to be in part responsible for the biomarkers found in petroleum.

This theory is a minority opinion, especially amongst geologists; no oil companies are currently known to explore for oil based on this theory.


[edit] Classification
See also: Benchmark (crude oil)
The oil industry classifies "crude" by the location of its origin (e.g., "West Texas Intermediate, WTI" or "Brent") and often by its relative weight or viscosity ("light", "intermediate" or "heavy"); refiners may also refer to it as "sweet," which means it contains relatively little sulfur, or as "sour," which means it contains substantial amounts of sulfur and requires more refining in order to meet current product specifications. Each crude oil has unique molecular characteristics which are understood by the use of crude oil assay analysis in petroleum laboratories.

Barrels from an area in which the crude oil's molecular characteristics have been determined and the oil has been classified are used as pricing references throughout the world. These references are known as Crude oil benchmarks:

Brent Crude, comprising 15 oils from fields in the Brent and Ninian systems in the East Shetland Basin of the North Sea. The oil is landed at Sullom Voe terminal in the Shetlands. Oil production from Europe, Africa and Middle Eastern oil flowing West tends to be priced off the price of this oil, which forms a benchmark.
West Texas Intermediate (WTI) for North American oil.
Dubai, used as benchmark for Middle East oil flowing to the Asia-Pacific region.
Tapis (from Malaysia, used as a reference for light Far East oil)
Minas (from Indonesia, used as a reference for heavy Far East oil)
The OPEC Reference Basket, a weighted average of oil blends from various OPEC (The Organization of the Petroleum Exporting Countries) countries.




[edit] Means of production

[edit] Extraction
Main article: Extraction of Petroleum
The most common method of obtaining petroleum is extracting it from oil wells found in oil fields. After the well has been located, various methods are used to recover the petroleum. Primary recovery methods are used to extract oil that is brought to the surface by underground pressure, and can generally recover about 20% of the oil present. After the oil pressure has depleted to the point that the oil is no longer brought to the surface, secondary recovery methods draw another 5 to 10% of the oil in the well to the surface. Finally, when secondary oil recovery methods are no longer viable, tertiary recovery methods reduce the viscosity of the oil in order to bring more to the surface.


[edit] Alternative methods
During the last oil price peak, other alternatives to producing oil gained importance. The best known such methods involve extracting oil from sources such as oil shale or tar sands. These resources are known to exist in large quantities; however, extracting the oil at low cost without negatively impacting the environment remains a challenge.

It is also possible to transform natural gas or coal into oil (or, more precisely, the various hydrocarbons found in oil). The best-known such method is the Fischer-Tropsch process. It was a concept pioneered in Nazi Germany when imports of petroleum were restricted due to war and Germany found a method to extract oil from coal. It was known as Ersatz ("substitute" in German), and accounted for nearly half the total oil used in WWII by Germany. However, the process was used only as a last resort as naturally occurring oil was much cheaper. As crude oil prices increase, the cost of coal to oil conversion becomes comparatively cheaper. The method involves converting high ash coal into synthetic oil in a multi-stage process. Ideally, a ton of coal produces nearly 200 liters (1.25 bbl, 52 US gallons) of crude, with by-products ranging from tar to rare chemicals.

Currently, two companies have commercialised their Fischer-Tropsch technology. Shell in Bintulu, Malaysia, uses natural gas as a feedstock, and produces primarily low-sulfur diesel fuels.[8] Sasol[9] in South Africa uses coal as a feedstock, and produces a variety of synthetic petroleum products.

The process is today used in South Africa to produce most of the country's diesel fuel from coal by the company Sasol. The process was used in South Africa to meet its energy needs during its isolation under Apartheid. This process has received renewed attention in the quest to produce low sulfur diesel fuel in order to minimize the environmental impact from the use of diesel engines.

An alternative method of converting coal into petroleum is the Karrick process, which was pioneered in the 1930s in the United States. It uses high temperatures in the absence of ambient air, to distill the short-chain hydrocarbons of petroleum out of coal.

More recently explored is thermal depolymerization (TDP), a process for the reduction of complex organic materials into light crude oil. Using pressure and heat, long chain polymers of hydrogen, oxygen, and carbon decompose into short-chain petroleum hydrocarbons. This mimics the natural geological processes thought to be involved in the production of fossil fuels. In theory, TDP can convert any organic waste into petroleum.


[edit] History
Petroleum, in some form or other, is not a substance new in the world's history. More than four thousand years ago, according to Herodotus and confirmed by Diodorus Siculus, asphalt was employed in the construction of the walls and towers of Babylon; there were oil pits near Ardericca (near Babylon), and a pitch spring on Zacynthus.[10] Great quantities of it were found on the banks of the river Issus, one of the tributaries of the Euphrates. Ancient Persian tablets indicate the medicinal and lighting uses of petroleum in the upper levels of their society.

The first oil wells were drilled in China in the 4th century or earlier.[citation needed] They had depths of up to 243 meters (about 800 feet) and were drilled using bits attached to bamboo poles.[citation needed] The oil was burned to evaporate brine and produce salt. By the 10th century, extensive bamboo pipelines connected oil wells with salt springs. The ancient records of China and Japan are said to contain many allusions to the use of natural gas for lighting and heating. Petroleum was known as burning water in Japan in the 7th century.[10]

In the 8th century, the streets of the newly constructed Baghdad were paved with tar, derived from easily accessible petroleum from natural fields in the region. In the 9th century, oil fields were exploited in the area around modern Baku, Azerbaijan, to produce naphtha. These fields were described by the geographer Masudi in the 10th century, and by Marco Polo in the 13th century, who described the output of those wells as hundreds of shiploads. (See also: Timeline of Islamic science and technology.)

The earliest mention of American petroleum occurs in Sir Walter Raleigh's account of the Trinidad Pitch Lake in 1595; whilst thirty-seven years later, the account of a visit of a Franciscan, Joseph de la Roche d'Allion, to the oil springs of New York was published in Sagard's Histoire du Canada. A Russian traveller, Peter Kalm, in his work on America published in 1748 showed on a map the oil springs of Pennsylvania.[10]

The modern history of petroleum began in 1846 with the discovery of the process of refining kerosene from coal by Atlantic Canada's Abraham Pineo Gesner. The first modern oil well was drilled in 1848 by Russian engineer F.N. Semyonov, on the Apsheron Peninsula north-east of Baku. Poland's Ignacy Łukasiewicz discovered a means of refining kerosene from the more readily available "rock oil" ("petr-oleum") in 1852 and the first rock oil mine was built in Bóbrka, near Krosno in southern Poland in the following year. These discoveries rapidly spread around the world, and Meerzoeff built the first Russian refinery in the mature oil fields at Baku in 1861. At that time Baku produced about 90% of the world's oil.


Oil field in California, 1938.The first commercial oil well drilled in North America was in Oil Springs, Ontario, Canada in 1858, dug by James Miller Williams. The American petroleum industry began with Edwin Drake's drilling of a 69-foot-deep oil well in 1859, on Oil Creek near Titusville, Pennsylvania, for the Seneca Oil Company (originally yielding 25 barrels a day, by the end of the year output was at the rate of 15 barrels).[10] The industry grew slowly in the 1800s, driven by the demand for kerosene and oil lamps. It became a major national concern in the early part of the 20th century; the introduction of the internal combustion engine provided a demand that has largely sustained the industry to this day. Early "local" finds like those in Pennsylvania and Ontario were quickly exhausted, leading to "oil booms" in Texas, Oklahoma, and California.

Early production of crude petroleum in the United States:[10]

1859: 2,000 barrels
1869: 4,215,000 barrels
1879: 19,914,146 barrels
1889: 35,163,513 barrels
1899: 57,084,428 barrels
1906: 126,493,936 barrels
By 1910, significant oil fields had been discovered in Canada (specifically, in the province of Alberta), the Dutch East Indies (1885, in Sumatra), Iran (1908, in Masjed Soleiman), Peru, Venezuela, and Mexico, and were being developed at an industrial level.

Even until the mid-1950s, coal was still the world's foremost fuel, but oil quickly took over. Following the 1973 energy crisis and the 1979 energy crisis, there was significant media coverage of oil supply levels. This brought to light the concern that oil is a limited resource that will eventually run out, at least as an economically viable energy source. At the time, the most common and popular predictions were always quite dire, and when they did not come true, many dismissed all such discussion. The future of petroleum as a fuel remains somewhat controversial. USA Today news (2004) reports that there are 40 years of petroleum left in the ground. Some would argue that because the total amount of petroleum is finite, the dire predictions of the 1970s have merely been postponed. Others argue that technology will continue to allow for the production of cheap hydrocarbons and that the earth has vast sources of unconventional petroleum reserves in the form of tar sands, bitumen fields and oil shale that will allow for petroleum use to continue in the future, with both the Canadian tar sands and United States shale oil deposits representing potential reserves matching existing liquid petroleum deposits worldwide.

Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total energy consumption in the United States, but is responsible for only 2% of electricity generation. Petroleum's worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world's most important commodities. Access to it was a major factor in several military conflicts including World War II and the Persian Gulf Wars of the late twentieth and early twenty-first centuries. The top three oil producing countries are Saudi Arabia, Russia, and the United States. About 80% of the world's readily accessible reserves are located in the Middle East, with 62.5% coming from the Arab 5: Saudi Arabia (12.5%), UAE, Iraq, Qatar and Kuwait. However, with today's oil prices, Venezuela has larger reserves than Saudi Arabia due to crude reserves derived from bitumen.


[edit] Uses
The chemical structure of petroleum is composed of hydrocarbon chains of different lengths. Because of this, petroleum may be taken to oil refineries and the hydrocarbon chemicals separated by distillation and treated by other chemical processes, to be used for a variety of purposes. See Petroleum products.


[edit] Fuels
Ethane and other short-chain alkanes which are used as fuel
Diesel fuel
Fuel oils
Gasoline
Jet fuel
Kerosene
Liquid petroleum gas (LPG)

[edit] Other derivatives
Certain types of resultant hydrocarbons may be mixed with other non-hydrocarbons, to create other end products:

Alkenes (olefins) which can be manufactured into plastics or other compounds
Lubricants (produces light machine oils, motor oils, and greases, adding viscosity stabilizers as required).
Wax, used in the packaging of frozen foods, among others.
Sulfur or Sulfuric acid. These are a useful industrial materials. Sulfuric acid is usually prepared as the acid precursor oleum, a byproduct of sulfur removal from fuels.
Bulk tar.
Asphalt
Petroleum coke, used in speciality carbon products or as solid fuel.
Paraffin wax
Aromatic petrochemicals to be used as precursors in other chemical production.

[edit] Alternatives to petroleum fuels (gasoline and diesel)
Main article: Energy development
This section is a stub. You can help by expanding it.

The term alternative propulsion or "alternative methods of propulsion" includes both:

alternative fuels used in standard or modified internal combustion engines (i.e. combustion hydrogen).
propulsion systems not based on internal combustion, such as those based on electricity (for example, electric or hybrid vehicles), compressed air, or fuel cells (i.e. hydrogen fuel cells).
Nowadays, cars can be classified between the next main groups:

Parapetro cars, this is, only can use petroleum, biodiesel and biobutanol (instead of gasoline).
Hybrid vehicle, that uses petroleum and other source, generally, electricity.
Petrofree car, that can not use petroleum, like 100 % electric cars, hydrogen vehicles...
See also: renewable energy, greenhouse gas, Global warming, climate change, and bivalent

[edit] Consumption statistics

2004 U.S. government predictions for oil production other than in OPEC and the former Soviet Union




World energy consumption, 1980-2030. Source: International Energy Outlook 2006.






[edit] Environmental effects

Global fossil carbon emissions, an indicator of consumption, for 1800-2000. Total is black. Oil is in blue.The presence of oil has significant social and environmental impacts, from accidents and routine activities such as seismic exploration, drilling, and generation of polluting wastes. Oil extraction is costly and sometimes environmentally damaging, although Dr. John Hunt of the Woods Hole Oceanographic Institution pointed out in a 1981 paper that over 70% of the reserves in the world are associated with visible macroseepages, and many oil fields are found due to natural leaks. Offshore exploration and extraction of oil disturbs the surrounding marine environment.[11] But at the same time, offshore oil platforms also form micro-habitats for marine creatures. Extraction may involve dredging, which stirs up the seabed, killing the sea plants that marine creatures need to survive. Crude oil and refined fuel spills from tanker ship accidents have damaged ecosystems in Alaska, the Galapagos Islands, Spain, and many other places.

Burning oil releases carbon dioxide into the atmosphere, which contributes to global warming. Per energy unit, oil produces less CO2 than coal, but more than natural gas. However, oil's unique role as a transportation fuel makes reducing its CO2 emissions a particularly thorny problem; amelioration strategies such as carbon sequestering are generally geared for large power plants, not individual vehicles.

Renewable energy alternatives do exist, but given current technology, alternatives are uneconomical. Solar, wind, geothermal, and other renewable electricity sources cannot directly replace high energy density liquid petroleum for transportation use; instead automobiles and other equipment must be altered to allow using electricity (in batteries) or hydrogen (via fuel cells or internal combustion) which can be produced from renewable sources. Other options include using biomass-origin liquid fuels (ethanol, biodiesel). Any combination of solutions to replace petroleum as a liquid transportation fuel will be a very large undertaking.

See also: Hydrogen economy

[edit] Future of oil
Main article: Hubbert peak theory

Diesel fuel spill on a roadThe Hubbert peak theory (also known as peak oil) is a proposition which predicts that future world petroleum production must inevitably reach a peak and then decline at a similar rate to the rate of increase before the peak as these reserves are exhausted. It also suggests a method to calculate mathematically the timing of this peak, based on past production rates, past discovery rates, and proven oil reserves.

Controversy surrounds the theory for numerous reasons. Past predictions regarding the timing of the global peak have failed, causing a number of observers to disregard the theory. Further, predictions regarding the timing of the peak are highly dependent on the past production and discovery data used in the calculation.

Proponents of peak oil theory also refer as an example of their theory, that when any given oil well produces oil in similar volumes to the amount of water used to obtain the oil, it tends to produce less oil afterwards, leading to the relatively quick exhaustion and/or commercial inviability of the well in question.

The issue can be considered from the point of view of individual regions or of the world as a whole. Hubbert's prediction for when US oil production would peak turned out to be correct, and after this occurred in 1971 - causing the US to lose its excess production capacity - OPEC was finally able to manipulate oil prices, which led to the 1973 oil crisis. Since then, most other countries have also peaked: the United Kingdom's North Sea, for example in the late 1990s. China has confirmed that two of its largest producing regions are in decline, and Mexico's national oil company, Pemex, has announced that Cantarell Field, one of the world's largest offshore fields, was expected to peak in 2006, and then decline 14% per annum.

It is difficult to predict the oil peak in any given region (due to the lack of transparency in accounting of global oil reserves[12]). Based on available production data, proponents have previously (and incorrectly) predicted the peak for the world to be in years 1989, 1995, or 1995-2000. However these predictions date from before the recession of the early 1980s, and the consequent reduction in global consumption, the effect of which was to delay the date of any peak by several years. A new prediction by Goldman Sachs picks 2007 for oil and some time later for natural gas.[citation needed] Just as the 1971 U.S. peak in oil production was only clearly recognized after the fact, a peak in world production will be difficult to discern until production clearly drops off.

Many proponents of the Hubbert peak theory expound the belief that the production peak is imminent, for various reasons. The year 2005 saw a dramatic fall in announced new oil projects coming to production from 2008 onwards - in order to avoid the peak, these new projects would have to not only make up for the depletion of current fields, but increase total production annually to meet increasing demand.

The year 2005 also saw substantial increases in oil prices due to a number of circumstances, including war and political instability. oil prices rose to new highs. Analysts such as Kenneth Deffeyes[13] argue that these price increases indicate a general lack of spare capacity, and the price fluctuations can be interpreted as a sign that peak oil is imminent.


[edit] Pricing

Overnight gas price hike shown at a Chicago area BP-Amoco station (background). The Shell station (foreground) has not yet posted the 12 cent price hike.
Short-Term Oil Prices, 2005-2007 (not adjusted for inflation).
Medium-Term Oil Prices, 1994-2007 (not adjusted for inflation).
Long-Term Oil Prices, 1861-2006 (top line adjusted for inflation).References to the oil prices are usually either references to the spot price of either WTI/Light Crude as traded on the New York Mercantile Exchange (NYMEX) for delivery in Cushing, Oklahoma; or the price of Brent as traded on the Intercontinental Exchange (ICE, which the International Petroleum Exchange has been incorporated into) for delivery at Sullom Voe. The price of a barrel (which is 42 gallons) of oil is highly dependent on both its grade (which is determined by factors such as its specific gravity or API and its sulphur content) and location. The vast majority of oil will not be traded on an exchange but on an over-the-counter basis, typically with reference to a marker crude oil grade that is typically quoted via pricing agencies such as Argus Media Ltd and Platts. For example in Europe a particular grade of oil, say Fulmar, might be sold at a price of "Brent plus US$0.25/barrel" or as an intra-company transaction. IPE claim that 65% of traded oil is priced off their Brent benchmarks. Other important benchmarks include Dubai, Tapis, and the OPEC basket. The Energy Information Administration (EIA) uses the Imported Refiner Acquisition Cost, the weighted average cost of all oil imported into the US as their "world oil price".

Oil demand is highly dependent on global macroeconomic conditions, so this is also an important determinant of price. Some economists claim that high oil prices have a large negative impact on the global growth. This means that the relationship between the oil price and global growth is not particularly stable although a high oil price is often thought of as being a late cycle phenomenon.

OPEC, comprised of Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela, was formed to maintain the price of oil at a level most beneficial to its membership considered as a whole, and is considered to be a cartel by most observers.


[edit] Price history
It has been suggested that this section be split into a new article entitled Price of oil. (Discuss)
A recent low point was reached in January 1999, after increased oil production from Iraq coincided with the Asian financial crisis, which reduced demand. The prices then rapidly increased, more than doubling by September 2000, then fell until the end of 2001 before steadily increasing, reaching US $40 to US $50 per barrel by September 2004. [2] In October 2004, light crude futures contracts on the NYMEX for November delivery exceeded US $53 per barrel and for December delivery exceeded US $55 per barrel. Crude oil prices surged to a record high above $60 a barrel in June 2005, sustaining a rally built on strong demand for gasoline and diesel and on concerns about refiners' ability to keep up. This trend continued into early August 2005, as NYMEX crude oil futures contracts surged past the $65 mark as consumers kept up the demand for gasoline despite its high price. (see Oil price increases of 2004-2006).) Crude oil futures peaked at a close of over $77 a barrel in July 2006, and in December 2006 at about $63. That is just about where they began the year 2006.[3]

Individuals can now trade crude oil through online trading sites margin account or their banks through structured products indexed on the Commodities markets.

See also History and Analysis of Crude Oil Prices, asymmetric price transmission, and Benchmark (crude oil)


[edit] International market

Oil consumption per capita per barrels of oil each day (darker colors represent more consumption).

[edit] Petroleum efficiency among countries
There are two main ways to measure the petroleum efficiency of countries: by population or by GDP (gross domestic product). This metric is important in the global debate over oil consumption/energy consumption/climate change because it takes social and economic considerations into account when scoring countries on their oil consumption/energy consumption/climate change goals. Nations such as China and India with large populations tend to promote the use of population based metrics, while nations with large economies would tend to promote the GDP based metric.[citation needed]

Selected Nations Oil Efficiency (US dollar/barrel/day)
Switzerland 3.75
United Kingdom 3.34
Norway 3.31
Austria 2.96
France 2.65
Germany 2.89
Sweden 2.71
Italy 2.57
European Union 2.52
DRC 2.4
Japan 2.34
Australia 2.21
Spain 1.96
Bangladesh 1.93
Poland 1.87
United States 1.65
Belgium 1.59
World 1.47
Turkey 1.39
Canada 1.35
Mexico 1.07
Ethiopia 1.04
South Korea 1.00
Philippines 1.00
Brazil 0.99
Taiwan 0.98
China 0.34
Nigeria 0.94
Pakistan 0.93
Myanmar 0.89
India 0.86
Russia 0.84
Indonesia 0.71
Vietnam 0.61
Thailand 0.53
Saudi Arabia 0.46
Egypt 0.41
Singapore 0.40
Iran 0.35
Selected Nations Oil Efficiency (barrel/person/day)
DRC 0.13
Ethiopia 0.37
Bangladesh 0.57
Myanmar 0.73
Pakistan 1.95
Nigeria 2.17
India 2.18
Vietnam 2.70
Philippines 3.77
Indonesia 4.63
China 4.96
Egypt 7.48
Turkey 9.85
Brazil 11.67
Poland 11.67
World 12.55
Thailand 13.86
Russia 17.66
Mexico 18.07
Iran 21.56
European Union 29.70
United Kingdom 30.18
Germany 32.31
France 32.43
Italy 32.43
Austria 34.01
Spain 35.18
Switzerland 34.64
Sweden 34.68
Taiwan 41.68
Japan 42.01
Australia 42.22
South Korea 43.84
Norway 52.06
Belgium 61.52
United States 68.81
Canada 69.85
Saudi Arabia 75.08
Singapore 178.45


[edit] Top petroleum-producing countries
Source: Energy Statistics from the U.S. Government.

For oil reserves by country, see Oil reserves by country.


Oil producing countriesIn order of amount produced in 2004 in MMbbl/d & ML/d:

# Producing Nation for 2004 (×106bbl/d) (×103m³/d)
1 Saudi Arabia (OPEC) 10.37 1,649
2 Russia 9.27 1,474
3 United States 1 8.69 1,382
4 Iran (OPEC) 4.09 650
5 Mexico 1 3.83 609
6 China 1 3.62 576
7 Norway 1 3.18 506
8 Canada 1,3 3.14 499
9 Venezuela (OPEC) 1 2.86 455
10 United Arab Emirates (OPEC) 2.76 439
11 Kuwait (OPEC) 2.51 399
12 Nigeria (OPEC) 2.51 399
13 United Kingdom 1 2.08 331
14 Iraq (OPEC) 2 2.03 323

1 peak production of conventional oil already passed in this state

2 Though still a member, Iraq has not been included in production figures since 1998

3 Canada has the world's second largest oil reserves when tar sands are included, and is the leading source of U.S. imports, averaging 1.7 MMbbl/d in April 2006 [4].


[edit] Top petroleum-exporting countries

Oil exports by countryIn order of amount exported in 2003:

Saudi Arabia (OPEC)
Russia
Norway 1
Iran (OPEC)
United Arab Emirates (OPEC)
Venezuela (OPEC) 1
Kuwait (OPEC)
Nigeria (OPEC)
Mexico 1
Algeria (OPEC)
Libya (OPEC) 1
1 peak production already passed in this state

Note that the USA consumes almost all of its own production, while the UK has recently become a net-importer rather than net-exporter.

Total world production/consumption (as of 2005) is approximately 84 million barrels per day.

See also: Organization of Petroleum Exporting Countries.


[edit] Top petroleum-consuming countries
# Consuming Nation (bbl/day) (m³/day)
1 United States 20,030,000 3,184,516
2 China 6,391,000 1,016,088
3 Japan 5,578,000 886,831
4 Russia 2,800,000 445,164
5 Germany 2,677,000 425,609
6 India 2,320,000 368,851
7 Canada 2,300,000 365,671
8 South Korea 2,061,000 327,673
9 France 2,060,000 327,514
10 Italy 1,874,000 297,942
11 Saudi Arabia 1,775,000 282,202
12 Mexico 1,752,000 278,546
13 United Kingdom 1,722,000 273,776
14 Brazil 1,610,000 255,970

Source: CIA World Factbook


[edit] Top petroleum-importing countries

Oil imports by country# Importing Nation (bbl/day) (m³/day)
1 United States 13,150,000 2,090,683
2 Japan 5,449,000 866,322
3 China 3,226,000 512,893
4 Netherlands 2,284,000 363,127
5 France 2,281,000 362,650
6 South Korea 2,263,000 359,788
7 Italy 2,158,000 343,095
8 Germany 2,135,000 339,438
9 India 2,090,000 332,283
10 Spain 1,582,000 251,518
11 United Kingdom 1,084,000 172,342
12 Belgium 1,042,000 165,665
13 Canada 963,000 153,105
14 Turkey 616,500 98,016

Source: CIA World Factbook


[edit] Top petroleum non-producing and consuming countries
# Consuming Nation (bbl/day) (m³/day)
1 Japan 5,578,000 886,831
2 Germany 2,677,000 425,609
3 India 2,320,000 368,851
4 South Korea 2,061,000 327,673
5 France 2,060,000 327,514
6 Italy 1,874,000 297,942
7 Spain 1,537,000 244,363
8 Netherlands 946,700 150,513

Source : CIA World Factbook


[edit] Petroleum in the media
In addition to the mainstream media, petroleum is a topic which has been written and spoken publicly about by a plethora of experts and specialists, including economists, environmental activists, geologists, physicists, and college professors. It has been addressed in books, magazines, newspapers, documentaries, speeches, and more. Some popular topics to address include petroleum-related chemistry and chemical effects of petroleum and petroleum-burning, the remaining petrolem supply, petroleum's necessity within the present-day economy, its effect on foreign policy, and conservation of petroleum supplies.


[edit] Books about the petroleum industry
Peter Odell (2004). Why Carbon Fuels Will Dominate the 21st Century's Global Energy Economy. Multi Science. 0906522226.
Daniel Yergin (1991). The Prize: The Epic Quest for Oil, Money, and Power. Simon & Schuster. 0671502484.
Harold F. Williamson and Arnold R. Daum (1959). The American Petroleum Industry: Volume I, The Age of Illumination. Northwestern University Press.
Harold F. Williamson, Ralph L. Andreano, Arnold R. Daum, and Gilbert C. Klose (1963). The American Petroleum Industry: Volume II, The Age of Energy. Northwestern University Press.
Beychok, Milton R. (1967). Aqueous Wastes from Petroleum and Petrochemical Plants, 1st Edition, John Wiley and Sons. LCCN 67-19834.
Klare, Michael T. (2004). Blood and Oil: The Dangers and Consequences of America's Growing Dependency on Imported Petroleum, 1st Edition, Metropolitan Books. 0805073132.

[edit] Books about petroleum supply
John V. Mitchell (Associate Fellow Chatham House, London): A New Era for Oil Prices; 32 Pages, August 2006
Kenneth Deffeyes (2005). Beyond Oil: The View from Hubbert's Peak. Farrar, Straus and Giroux.
Matthew Simmons (2005). Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy. John Wiley & Sons. 0471790184.
James Howard Kunstler (2005). The Long Emergency: Surviving the Converging Catastrophes of the Twenty-first Century. Atlantic Monthly Press. 0871138883.
Thom Hartmann (2004 (revised ed. - first ed. 1997)). The Last Hours of Ancient Sunlight. Three Rivers Press. 1400051576.
Richard Heinberg (2003). The Party's Over: Oil, War, and the Fate of Industrial Societies.
C.J. Campbell (2004). The Coming Oil Crisis.
(2004) Out of Gas: The End of the Age of Oil.
Amory B. Lovins (2004). Winning the Oil Endgame. Rocky Mountain Institute. 1881071103.
Vaclav Smil (2003). Energy at the Crossroads : Global Perspectives and Uncertainties. The MIT Press. 0262194929.
Kenneth Deffeyes (2001). Hubbert's Peak : The Impending World Oil Shortage. Princeton. 0691090866.

[edit] Films about petroleum
Burning of the Standard Oil Co.'s Tanks, Bayonne, N.J. at the Internet Movie Database
California Oil Wells in Operation at the Internet Movie Database
Canada Strikes Oil: Leduc, Alberta 1947 at the Internet Movie Database
The End of Suburbia: Oil Depletion and the Collapse of the American Dream at the Internet Movie Database
http://www.endofsuburbia.com
Hellfighters at the Internet Movie Database
Incendio del pozo petrolero de Dos Bocas, Veracruz at the Internet Movie Database
La Industria del Petróleo at the Internet Movie Database
Industria petrolului at the Internet Movie Database
Oil - From Fossil to Flame at the Internet Movie Database
Oil Fires, Their Prevention and Extinguishment at the Internet Movie Database
Oil Storm at the Internet Movie Database
Roughnecks: The Story of Oil Drillers at the Internet Movie Database
Wildcatter: The Story of Texas Oil at the Internet Movie Database
Lektionen in Finsternis at the Internet Movie Database
A Crude Awakening: The Oil Crash at the Internet Movie Database
(Siberiade) Siberiade at the Internet Movie Database
Syriana
"Destination Earth" at the Prelinger Archives
Community Service, Inc. (Producer.) (2006.) The Power of Community: How Cuba Survived Peak Oil DVD

[edit] Writers covering the petroleum industry
Brian Black
Colin J. Campbell
Kenneth S. Deffeyes
Thomas Gold
David Goodstein
Jay Hanson
Daniel Yergin
Derrick Jensen

[edit] See also
Oil reserves
Peak oil theory
Abiogenic petroleum origin
ANWR (Arctic National Wildlife Refuge)
List of oil fields
List of oil-producing states
List of oil-consuming states
List of Countries that have already passed their production peak
List of petroleum companies
Ecodollar
Energy conservation
Energy crisis: 1973 energy crisis, 1979 energy crisis
Fossil fuel
Global warming
Greenhouse gases
Gross domestic product per barrel
History of the Petroleum Industry
Hubbert peak (aka peak oil)
Future energy development
Price of oil
1990 spike in the price of oil
Mineral oil
Natural gas, another important energy source
Non-conventional oil
Oil imperialism and nationalization
Oil phase-out in Sweden
Oil price increases of 2004-2006
Oil refinery
Oil supplies
Oil well
Olduvai theory (not strictly about oil, but it basically assumes that oil and gas are the only significant energy sources)
Platts
Petroleum disasters
Petroleum geology
Petrodollar
Petro-free : that does not use or sell petroleum (i.e. petro-free fuel station).
Petroleum politics
Renewable energy
Soft energy path
Thermal depolymerization
Thomas Gold
Eugene Island
Energy: world resources and consumption



[edit] References
^ Manual of Petroleum Measurement Standards (MPMS), by the American Petroleum Institute
^ IEA Key World Energy Statistics
^ "Crude oil is made into different fuels"
^ EIA reserves estimates
^ CERA report on total world oil
^ Heat of Combustion of Fuels
^ Petroleum Study
^ Shell Middle Distillate Synthesis Malaysia
^ Sasol corporate website
^ a b c d e This article incorporates text from the Encyclopædia Britannica Eleventh Edition article "Petroleum", a publication now in the public domain.
^ [1]
^ see e.g. "Study raises doubts about Saudi oil reserves"
^ Kenneth Deffeyes (2005). Beyond Oil: The View from Hubbert's Peak. Farrar, Straus and Giroux

[edit] External links
Wikimedia Commons has media related to:
PetroleumWikinews has news related to:
CommoditiesOTS Heavy Oil Science Centre (includes overview of all phases of the oil industry)
US Energy Information Administration - Part of the informative website of the US Government's Energy Information Administration.
[5] - Environmental effects of oil extraction
American Petroleum Institute - the trade association of the US oil industry.
How derivatives drive oil prices up, despite ample supply in physical oil market (9-Jun-06)
Andy Xie, MorganStanley economist for Asia, thinks oil is financial bubble (16-Jun-2005)
Explanation of pricing mechanism in oil markets
The real problems with $50 oil, An analysis by Henry C.K. Liu in Asia Times Online, details the economic impact of high oil prices.
The Oil Drum - A Community Discussion about Peak Oil and the Oil Industry.
Petroleum directory Industry news service
Oil prices and industry news
BP Statistical Review of World Energy
Oil Prices
Oil Rocks
Nymex - oil trading center of the US
Bloomberg Energy Prices - current prices on world mercantile exchanges
Oil Marketer - oil news and market information
Oil in troubled waters - Economist article on investor approaches to oil markets, supply, and future
One Case of an Oil and Gas Field being 'Renewed'
Global Oil Watch - Real-time oil and gas news and resources
PetroTalk Portal for petro related Articles, Discussion, Links and more
Petroleum Club Online Community for the Petroleum Industry
Interactive Oil Well Map of Mississippi Mississippi Oil Journal
Oil, petroleum: Development, production, consumption and reserves
World oil consumption World oil consumption
Drilling sites in Western South Dakota Drilling sites in South Dakota

[edit] Articles
Discovery of oil in South East Asia - History of an oil town.
The End of the Age of Oil - article adapted from a talk by Caltech vice provost and professor of physics David Goodstein
The Politics of Oil - A report on the oil industry's influence of lawmakers and public policy by the Center for Public Integrity.
BBC: Stability fears rise as oil reliance grows
House Votes to Reverse Ban on Offshore Drilling
Lee Raymond of Exxon Mobile believes oil supplies will rise
Known Saudi Arabian Oil Reserves Tripled
Pemex's oil estimates double: Mexican Oil company's estimate of reserves doubled.
Dismissal of the Claims of a Biological Connection for Natural Petroleum[14]
An introduction to the modern petroleum science, and to the Russian-Ukrainian theory of deep, abiotic petroleum origins.
Abiogenic Gas Debate
Anything Into Oil: Technological savvy could turn 600 million tons of turkey guts and other waste into 4 billion barrels of light Texas crude each year[15]
MSN Encarta article on petroleum
Where Does My Gasoline Come From ? Energy Information Administration (DoE).




[edit] Data
Department of Energy EIA - World supply and consumption
Department of Energy EIA - Crude Oil and Total Petroleum Imports to USA
US petroleum prices - from US Department of Energy EIA
European Brent prices since 1987
Price data (deflated and non-deflated) since 1861
International Fuel Prices 2007 with diesel and gasoline prices of more than 170 countries