Crude oil - BLACK GOLD

1. Crude Oil $ Black Gold $ Made By : Jaskaran S. Kohli

2. Crude Oil is a naturally occurring thick , dark brown  flammable liquid which is derived from Fossil Fuels. Crude Oil is also referred as Black Gold as it of immense economic importance. It is a non renewable resource ,thus its demand > supply leading to high price rise. An international body called OPEC controls the pricing of oil all throughout the globe. Oil prices have risen from $18.5 in 1976 to $150 in 2012. Introduction

3. What is Crude Oil ? Petroleum or Crude Oil is a naturally occurring thick , dark brown  flammable liquid found in the Upper Strata of the Earth’s Crust . It is recovered mostly through  oil drilling and is then refined into a large number of consumer products, like  petrol , kerosene,plastics   andpharmaceuticals. It is a type of Fossil Fuel consisting of a complex mixture of hydrocarbons. Hydrocarbon Crude Oil

4. Before it can be used crude oil must be refined. Hydrocarbons can be separated using distillation , which produces different fractions (or types) of oil and gas . Jet fuel Car fuel Road tar Distillation Plant Oil refinery Exploration and Production

5. Why Black Gold ? Petroleum products are extracted from Crude Oil, which is black in colour. Availability is minimum but demand is more. Its economic value is immense. Causes Inflation and affects the pricing of almost everything.

6. Top Oil Producing Countries # Nation 10 3 bbl/d (2007) 10 3 bbl/d (2008) 10 3 bbl/d (2009) Present Share 1 Saudi Arabia   10,234 10,782 9,760 11.8% 2 Russia   9,876 9,789 9,934 12.0% 3 United States  8,481 8,514 9,141 11.1% 4 Iran   4,043 4,174 4,177 5.1% 5 China 3,901 3,973 3,996 4.8%

7. Top Oil Consuming Countries Nation (1000 bbl/day) (1000 m 3 /day) population in millions bbl/year per capita United States  19,497.95 3,099.9 314 22.6 China 7,831.00 1,245.0 1345 2.1 Japan  4,784.85 760.7 127 13.7 India   2,962.00 470.9 1198 0.9 Russia   2,916.00 463.6 140 7.6

8. Soaring Prices

9. Factors affecting Price Rise Changes in Supply & Demand. Global Equity Market. Movement in Dollar($). Organization of the Petroleum Exporting Countries (OPEC) controls the price. Increase in Tax Rate. Wars , Recessions and Natural Calamities are other important factors.

10. S upply & D emand determine the price of fuel. If Demand > Supply , prices will rise and vice-versa. Global Consumption has grown by 1.2 Million Barrels per day. Oil is a Non-Renewable resource, hence is limited. Supply & Demand

11. Role of Organization of the Petroleum Exporting Countries ( OPEC) is an intergovernmental organization of twelve oil-producing countries  . It controls and regulates Global Price of crude oil. Its main objective is to peruse various ways and measures to stabilize the price of oil in International Markets. OPEC

12. Peak oil  is the point in time when the maximum rate of petroleum extraction is reached, after which the rate of production is expected to enter terminal decline. Peak oil In 1956, Hubbert predicted that global oil production would peak around the Year 2000 and trigger an Energy Crisis with power blackouts and rising costs of energy and fuel . Era of energy crisis

13. When Oil Prices rise : Rise in Inflation Rates. Government spending on Subsidy Increases. GDP is affected negatively. Foreign Currency reserves reduce. Prices of almost everything increases, causing extreme hardship towards the common man. Leads to wars, protests and political instability.

14. Effect on US Economy Overall consumption of gasoline is down by 7%. 2.5% decline in USA GDP due to rising oil prices. Prices hit a shocking $150 per barrel leading to rapid inflation. A $10-a-barrel increase in the price of oil reduces U.S. GDP growth by 0.5 percentage points .

15. Price in INDIA Prices of crude oil have risen by more than 33% in the past two months. Indian Rupee has depreciated from Rs . 44 per dollar in April 2011 to Rs.49 now . Inflation also went up to 12.27% which was highest for India in 2 decades. India’s subsidy zoomed to 2.5%of GDP .

16. Effect on Indian Economy Rapid Inflation. Hike in Interest Rates. Slowdown in Economic Growth. Fall in Employment Opportunities . Reduced amount for infrastructure.

17. Inflation : went up to 12.27%. Fuel Subsidy Burden : of Rs. 1,42,203 Crores Rise in Cost of Imports : have risen by $1.2 Billion. Widening of Trade Deficit :for 2009-10 was $117.3 Billion . E stimated that a sustained 10 dollar increase in oil prices lead to a 1.5 per cent reduction in the GDP.

18. Extinction of whales. Extraction of Oil leads to land degradation. Global Warming: petroleum releases carbon dioxide, a  greenhouse gas. Oil Spills: damages land, pollutes water and kills marine animals. Tar balls: huge blob of oil causing contamination and pollution. Environment

19. Crude oil and refined fuel spills from tanker ship  and damage natural  ecosystems. Can be on land or sea. Q uantity of oil spilled during accidents has ranged from a few hundred tons to several hundred thousand tons. Oil Spills Effects Land Degradation. Pollutes sea water. Kills Marine life. Illnesses and Diseases.

20. Alternatives Alternatives to petroleum-based vehicle fuels: Alternatives to burning petroleum:

21. In a NUTSHELL 2012 1997

22. Thank You Jaskaran Singh