Petroleum Engineering Course

Name: Malak Ahmad Abu Radaha

REG.Number:31715019045

Introduction:
Crude oil is a naturally occurring, unrefined petroleum product composed of
hydrocarbon deposits and other organic materials. A type of fossil fuel, crude
oil can be refined to produce usable products such as gasoline, diesel, and
various other forms of petrochemicals. It is a nonrenewable resource, which
means that it can't be replaced naturally at the rate we consume it and is,
therefore, a limited resource.
Crude oil is one of the most economically mature commodity markets in the
world. Even though most crude oil is produced by a relatively small number of
companies, and often in remote locations that are very far from the point of
consumption, trade in crude oil is robust and global in nature. Nearly 80% of
international crude oil transactions involve delivery via waterway in
supertankers. Oil traders are able to quickly redirect transactions towards
markets where prices are higher.

Oil and coal are global commodities that are shipped all over the world. Thus,
global supply and demand determines prices for these energy sources. Events
around the world can affect our prices at home for oil-based energy such as
gasoline and heating oil. Oil prices are high right now because of rapidly
growing demand in the developing world (primarily Asia). As demand in these
places grows, more oil cargoes head towards these countries. Prices in other
countries must rise as a result. Political unrest in some oil-producing nations
also contributes to high prices - basically, there is a fear that political instability
could shut down oil production in these countries. OPEC, the large oil-
producing cartel, does have some ability to influence world prices, but OPEC's
influence in the world oil market is shrinking rapidly as new supplies in non-
OPEC countries are discovered and developed.
Crude oil, or “black gold,” is one of the world's most precious commodities.
Price changes in the commodity can affect the economic ecosystem at every
level, from family budgets to corporate earnings to the nation's GDP. Indeed,
sudden price drops or unexpected spikes can send global financial markets into
a tizzy.

Crude oil prices change quickly in response to news cycles, policy changes, and
fluctuations in the world's markets. Since 2014, oil prices have experienced a
downward journey, falling from highs of around $105 per barrel. In February
and March of 2020, crude prices accelerated their decline in reaction to the
coronavirus pandemic and an expected sharp drop in demand for oil. In
addition, major oil producers failed to come to an agreement on production
cuts, exacerbating the problem. By mid-March 2020, the price of U.S. crude oil
was fluctuating just around $30 per barrel.

Oil Barrel Prices Versus End User Prices:

When you look at pricing overall, it’s important to understand that crude oil
pricing is different than the final end-user gasoline pricing. Crude oil is the
natural state of the oil when it comes from the ground. That crude oil then
goes into refineries, where companies process the oil into various types of
fuels, lubricants and sources for petroleum-based products.
The price of gasoline, heating oil and other end-user products tends to shift
with the price per barrel of crude oil. When crude oil costs more, it naturally
costs more to produce those other products. However, other factors can come
into play during the refining process that influence end-user pricing of oil
based products. This includes outages at the refinery, market demands for a
particular petroleum product and seasonal variations.

Current Crude Oil Supply:

As with any commodity, the supply influences the price of oil and gas. An
ample supply means the price per barrel drops. When supply is low, the price
per barrel increases. The supply levels vary depending on current production
and current demand.

The Organization of Petroleum Exporting Countries accounts for about 40

percent of all crude oil production in the world. OPEC exports about 60
percent of all internationally traded petroleum. With such a large share of the
global oil output, OPEC has a strong impact on the current supply. The
organization can restrict or increase the supply to affect global pricing.

Where is crude oil located?

We can find oil supplies just about everywhere in the world, but some areas
are more abundant than others. Countries in the Middle East, including Saudi
Arabia, Iraq, Iran and others, have massive supplies of oil and are the world's
leading oil exporters.
The price of oil this month in Jordan?…Price of oil has
increased this week
increases included a 2% rise for 90-octane gasoline from $377.1 to $384.6 per
ton, and the price of 95-octane gasoline from $400.6 per ton to $407.8 – an
increase of 1.8%.
“As for the price of oil, it will rise to $249.3 per ton, compared to the price
recorded in the first week of [July] from $233.6 – an increase of 6.7%,” said the
ministry.
Petroleum gas stands at $345 per ton this month, compared to $335.2 in June.
The price of crude oil rose to $43.2 per barrel this month, compared to $42.9
last month.
The price of diesel increased from $367.9 per ton to $371.6, an increase of 1%.
Gas prices increased by 2% - from $335.2 per ton to $340.8.