Introduction To Barrel Oil Markets

INTRODUCTION TO
BARREL OIL
MARKETS
PRESENTATION
BY
AYUSHI PASSI
RANJITHA BB
SANJAY KISHAN
Barrel (Unit of Measurement)
■ One barrel weighs 42 U.S. gallons, equal to 190.99 liters; or, 0.137 tons. Multiply the volume by 4.546
■ The 42-barrel became the global standard used to refer to petroleum prices and production rates even
though oil was moved with tankers and pipelines.
■ Prices of crude oil are measured in barrels, while production totals across all producing countries are
measured in million barrels per day.
■ The average oil price was $57/barrel in 2019, but in the past decade have been as high as $110/barrel
and as low as $30/barrel.
What Products Are Made From a Barrel of Crude Oil?
Depending on the refinery processing operations, we get many products from crude oil. The finished
goods brought to the market vary significantly in price and demand. These products include:
• Ultra-Low Sulfur Diesel (ULSD/Heating Oil) - Low-sulfur fuels are the key to reducing emissions from
existing vehicles and enabling advanced control technologies and fuel-efficient designs for new vehicles
• Kerosene/Jet Fuel
• Hydrocarbon Gas Liquids
• Residual Fuel
differentiates each product refined
from a single barrel of crude
oil
What is the purpose of OPEC
■ OPEC is a cartel of oil-producing countries that unites under one common goal: to maintain and
stabilize international crude oil prices.
■ With all of these developments in the rearview, 2020 has presented completely novel crude oil
environments that involve OPEC, its allies, and the greater economic landscape which culminated
in crude oil prices sinking well below zero for the first time in history.
■ In a series of unprecedented global events, the supply and demand balance swung swiftly toward
surplus. Saudi Arabia and Russia entered into a price war that resulted in a produce-at-will
mentality that sent production to historic highs. At the same time, demand for crude oil products,
notably gasoline and diesel, disappeared in a matter of days and weeks as COVID-19 shuttered
businesses and kept consumers at home.
■ The crude oil price had touched 130 dollars a barrel earlier this year. It fell later and
went below $85 per barrel in September. But now OPEC+, the oil-producing group, has
decided to decrease oil production, which means oil prices may increase from the
current levels. An increase in crude oil prices is never good for the Indian economy.
■ Oil prices jumped nearly extended gains on Tuesday, as OPEC+ considered reducing
output by more than 1 million barrels per day (bpd) to support falling prices, with its
biggest cut since the start of the COVID-19 pandemic. The demand for oil has fallen
amid concerns of recession across the world. Let us look at how oil prices and the
Indian economy are linked.
Barrel oil price
140
120
100
80
60
40
20
0
12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 20 20 21 21 21 21 22 22 22
an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul- ct- an- pr- Jul-
J A O J A O J A O J A O J A O J A O J A O J A O J A O J A O J A
price change
CRUDE OIL PRICE FROM 2019 - 2022
140
120
100
80
60
40
20
0
19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20 21 21 21 21 21 21 21 21 21 21 21 21 22 22 22 22 22 22 22
an- eb- ar- pr- ay- un- Jul- ug- ep- ct- ov- ec- an- eb- ar- pr- ay- un- Jul- ug- ep- ct- ov- ec- an- eb- ar- pr- ay- un- Jul- ug- ep- ct- ov- ec- an- eb- ar- pr- ay- un- Jul-
J F M A M J A S O N D J F M A M J A S O N D J F M A M J A S O N D J F M A M J
price
How is it affecting India?
■ India's fuel dynamics. Global crude oil prices and the dollar/rupee exchange rate affect the pump
prices in India since it imports about 85 percent of its oil, which is then refined by domestic oil
marketing companies and sold at pumps.
■ However, after a price hike on November 4, 2021, they did not raise prices for four months at the
government’s behest, even as global crude oil prices rose 45 percent, from $81.6 a barrel to
$118.5 per barrel over that time. As a result, the recent rise in pump prices is merely India catching
up with global prices of the commodity.
■ On October 2021, the government-imposed tax on petrol rose by more than 200 percent and that
on diesel by more than 600 percent, according to a report by the Observer Research Foundation
(ORF)

Introduction To Barrel Oil Markets

Uploaded by

Copyright:

Available Formats

Introduction To Barrel Oil Markets

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction To Barrel Oil Markets

Uploaded by

Copyright:

Available Formats

INTRODUCTION TO

You might also like