Crude Oil Deal Requirement

I am not a crude oil specialist, but am sure this information may help you in the first place (especially see the links at the end):

The major categories of crude oil:

Category by Sulfur contents:

Sweet Crude: The total sulfur level in the oil is less than 0.5%. Sweet crude oil contains small amounts of hydrogen sulfide and carbon dioxide. High quality, low sulfur crude oil is commonly used for processing into gasoline

Sour Crude: The total sulfur level in the oil is greater than 0.5%. Sour crude is usually processed into heavy oil such as diesel and fuel oil rather than gasoline to reduce processing cost

Category by API Gravity:

Heavy Crude: Heavy crude oil or Extra Heavy Crude oil is any type of crude oil which does not flow easily. It is called heavy because its density or specific gravity is higher than that of light crude oil. The API gravity (see API gravity definition below) of Heavy crude oil is lower than 22 degree.

Light Crude: Light crude oil is liquid petroleum that has a low density and flows freely at room temperature. It has a low viscosity, low specific gravity and high API gravity (greater than 31 degree) due to the presence of a high proportion of light hydrocarbon fractions. It generally has a low wax content. Light crude oil receives a higher price than heavy crude oil on commodity markets because it produces a higher percentage of gasoline and diesel fuel when converted into products by an oil refinery.

Medium Crude: It is the crude oil which falls in between Heavy and Light Crude oil. The API gravity is less than 31 degree and greater than 22 degree.

Crude Oil is generally called by both categories like "Light Sweet", "Heavy Sour", "Medium Sweet" etc.

Another Type of Crude (mostly the oil-sands upgraded crude):

Synthetic Crude: Synthetic crude is the output from a bitumen/extra heavy oil upgrader facility used in connection with oil sand production. The properties of the synthetic crude depend on the processes (Coking, FCC or Cracking) used in the upgrading. Typically, it is low in sulfur and has an API gravity of around 30. It is also known as "upgraded crude".

API Gravity: It is defined by the following formula:

API gravity in degree = 141.5 / (Specific Gravity at 60 degree F) – 131.5

The API gravity of crude whose SG is same as water at 60 degree F is 10.

Some useful links for World Crude Oil Characteristics:

http://www.platts.com/IM.Platts.Content/MethodologyReferences/MethodologySpecs/crudeoilspecs.pdf

http://tinglebr.files.wordpress.com/2008/02/crude-oil-specifications.pdf

http://www.window.state.tx.us/specialrpt/energy/pdf/04-CrudeOil.pdf

- MS

Your information is quite helpful and also crude oil specifiation should be the most important to start a deal.

Is there any commercail terms and conditions to negotiate crude oil deal with supplier?

Hee-Duck, Kwon

You can find lot of historical data for the crude price across the world from this link: http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm

To see the historic data, click on the 'View History' column.

Hope this also help you.

- MS

Thank you for kind reply.

How about payment? I think it very sensitive matter because we want to pay after receipt of crude oil along with quality confirmation bowever seller has opposite position. How to solve it or any netural guarantee?

Kwon, Hee-Duck