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There are in fact many products obtained from the processing of crude and otherhydrocarbon compounds. These include aviation gasoline, motor gasoline, naphtha,kerosene, jet fuel, distillate fuel oil, residual fuel oil, liquefied petroleum gas, lubricants,paraffin wax, petroleum coke, asphalt and other products. The prices of crude are highlyvolatile. High oil prices lead to inflation that in turn increases input costs; reduces non-oildemand and lower investment in net oil importing countries. India, which is a netimporter of oil, thus is often subject to the vagaries of price volatility in crude. Given thisscenario, crude futures will come as a boon to everyone, ranging from the governmentand corporate to retail users. Crude oil is marketed principally in New York, London andSingapore. Futures are sold promising next-month delivery at agreed amount, price andlocation, in a minimum of 1000 bbl, and are settled daily. Oil is priced relative to certainstandard kinds of crude. In London, it is Brent blend crude from the North Sea; about2/3 of the world's crude oil is priced in terms of Brent. In New York, West TexasIntermediate light, sweet crude is the standard. OPEC prices its oil in terms of a basketof seven crudes: Saudi Arab light, Emirates Dubai crude, Nigerian Bonny light, AlgerianSaharan blend, Indonesian Minas, Venezuelan Tia Juana, and Mexican Isthmus.Individual crudes are sold at a discount or premium, depending on quality and difficultyof transport. Crude oil is a very variable commodity.
World Wide Energy Scenario
In the past four years the world has
witnessed oil prices move from low of around $12per barrel to $70. Some analysts suggest that oil prices may cross $100 per barrel bynext year, but even at $100 the oil price will be in keeping with the adjusted real price atthe time of first oil shock. Within the energy scene, the 20
th
Century clearly belongs tooil. In this period, the share of oil has increased from practically nothing to as high as35-40%. This excludes non-commercial energy sources. During 1950-2000, demand foroil grew from 50 million barrels per day to 75 million barrels per day. In the last fiveyears, the estimated growth was another 10 million barrels per day. The large emergingeconomies in Asia will further push the demand by another 30 million barrels per day –a total of 115 million barrels per day by 2030.
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