Understanding the Demand
Unless you have spent the greater part of the past two years living under a rock or have been lost wandering in the wilderness, you have been inundated with a tremendous amount of information about oil, barrels of oil and the costs of barrels of oil. Of course, you have seen the final effect of the high price of a barrel of oil each time you pull into the local gasoline station to fill up … perhaps halfway … your automobile tank. With all that said, and having heard so much about barrels of oil in recent months, you may not even know what, exactly, is contained in a barrel of oil.
The standard barrel contains 42 U.S. gallons of crude oil. What is truly interesting about the refinement of a typical barrel is that the 42 gallons of crude oil will result in more than 44 gallons of petroleum products. In other words, during the refinement process, there is actually an increase in the volume of product realized. This occurs because there is a reduction in the density of some of the original crude oil as different petroleum products are created during the refinement process.
The refining process actually is rather simple. At its essence, refinement involves the distillation of crude oil into its constituent elements. After distillation, conversion occurs — which is the process of “cracking’ molecules to allow for a further refinement of the elements that form crude oil in the first instance. Finally, enhancement occurs. This is a process through which the quality of the ultimate product is enhanced in various ways. For example, sulfur might be removed to increase or enhance the quality of a product refined from crude oil.
The largest share of the 42 gallons of crude oil contained in a standard barrel ends up as finished motor gasoline. Motor gasoline accounts for 19.65 gallons of the finished product. Next in line is distillate fuel oil at 10.03 gallons.
Jet fuel comes in a rather distant third place in the refinement process. Of the original 42 gallons of crude oil in a barrel, that portion which will end up as jet fuel is 4.07 gallons. Residual fuel oil accounts for 1.72 gallons of the overall refined product.
Other petroleum products that are created from a barrel of oil during the refining process include: still gas, petroleum coke, liquefied refinery gas, asphalt and road oil, various oils for foodstocks, lubricants, special napthas, kerosene, waxes and an assortment of other miscellaneous products. (It is important to note that the different end products that can be produced from a barrel of oil differ in their percentages depending on what part of the world the crude oil originated from in the first instance.)
In reality, when you consider what is produced through the refinement process, it is hard to imagine another substance on the planet that can result in as many different products as does crude oil when refined. There is no exaggeration in saying that crude oil – after refinement – touches nearly every area of a person’s life…indeed, in many different ways.