What is "crude oil"?

Crude oil or crude oil are flammable mixtures of hydrocarbons that are naturally found in geological formations, such as rock layers. Most of the oil is a fossil fuel, formed by the action of intense pressure and heat on zooplankton and buried dead algae. Heavier crude produce more heat when they are burned, but have a lower API gravity and a market price than light flocks (or candies). It is a non-renewable resource, which means that it cannot be replaced naturally by the speed we consume and, therefore, is a limited resource.

Negative effects of oil dependence

The strong dependence on fossil fuels is cited as one of the main causes of global warming, a problem that has been strengthened over the last 20 years. Risks surrounding oil drilling include oil spills and ocean acidification, which damage the ecosystem. Many manufacturers have started to create products that depend on alternative energy sources, such as cars powered by electricity, houses powered by solar panels and communities that work with wind turbines.

Futures contracts

An oil futures contract is an agreement to buy or sell a specific amount of oil barrels at a predetermined price, on a pre-established date. When futures are purchased, a contract is signed between the buyer and the seller and guaranteed by a margin payment that covers a percentage of the total contract value. End users of the purchase of oil in the futures market to set a price; Investors buy futures essentially to bet on what the price will be in the future, and they will benefit from correctly guessing. In general, they liquidate or renew their futures positions before having to receive delivery.

Forecast of oil prices

Economists and experts have difficulty predicting the trajectory of oil prices, which are volatile and depend on different situations. They use a variety of forecasting tools and depend on the weather to confirm or deny their predictions. The five most used models are:

• Future oil prices

• Structural models based on regression

• Analysis of time series

• Bayesian auto regressive models

• Dynamic graphs of the general stochastic equilibrium

 

2 important uses for crude oil and why it is important

When we think of oil, we tend to think of fuel for our cars, trucks and airplanes and for oil heating. However, there is a wide variety of uses of crude oil that affect our lives, which means that reducing our dependence on oil may not be as easy as buying a hybrid car. As you can see, there are many important uses for crude oil as well as feeding your car.

2 important uses of crude oil

The plastic

This is probably the most widespread use of oil to think about. Plastic is used in almost everything you can find in a store. If an article does not contain plastic, it is likely to be stored or packaged in the oil-based polymer!

Clothing

The oil is used to help make non-flammable and colored clothes. It is used in the production of rayon, nylon, polyester and even artificial leathers. Furthermore, the suspensions are reinforced with petroleum based resins