Some people arbitrarily speak about oil as if it is a single, indistinguishably homogenous substance without any unique differentiation, but this is actually not the case at all! In fact, there are many different kinds of oil.
In its natural, unrefined state, crude oil ranges in density and consistency, from very thin, light weight and volatile fluidity to an extremely thick, semi-solid heavy weight oil.
There is also a tremendous gradation in the color that the oil extracted from the ground exhibits, ranging all the way from a light, golden yellow to the very deepest, darkest black imaginable.
For the purpose of having a set, agreed upon “vocabulary,” the petroleum industry often uses references to “Geographical Locations” in order to descriptively classify crude oils.
This is due to the fact that oil from different geographical locations will naturally have its own very unique properties. These oils vary dramatically from one another when it comes to their viscosity, volatility and toxicity.
The term “viscosity” relates to the oil's resistance to flow. Higher viscosity crude oil is much more difficult to pump from the ground, transport and refine.
The term “volatility” describes how quickly the oil evaporates into the air. Oils that are naturally highly volatile need additional effort to ensure that temperature regulation and sealing procedures loose as little oil as possible.
The term “toxicity” refers to how dangerously poisonous the oil & its refining processes are to local life, from humans, to flora and fauna as well as other environmentally fragile living entities and organisms. If an oil spill were to occur, each type of oil presents quite unique “clean up” challenges, procedures and priorities!
The four primary types of oil are:
(1) The Very Light Oils / Light Distillates which include: Jet Fuel, Gasoline, Kerosene, Light Virgin Naphtha, Heavy Virgin Naphtha, Petroleum Ether, Petroleum Spirit, and Petroleum Naphtha. These oils tend to be highly volatile and can evaporate within just a couple of days, which quickly diffuses and decreases toxicity levels.
(2) Light Oils / Middle Distillates which include: Most Grade 1 and Grade 2 Fuel Oils and Diesel Fuel Oils as well as Most Domestic Fuels and Light Crude Marine Gas Oils.
These oils are moderately volatile, less evaporative and moderately toxic.
(3) Medium Oils: Most of the crude oil on the market these days falls into this particular category. Low volatility makes for messier & more complex “clean ups” and when it comes to the increased toxicity levels, I believe we have all lived long enough to see what “Medium Oil” spills can do to the local ocean life out on the seas or local wildlife right here on “terra firma!”
(4) Heavy Fuel Oils which include the heavy crude oils, Grade 3,4,5 and 6 Fuel Oils (Bunker B & C) as well as Intermediate and Heavy Marine Fuels. With these oils there is very slow and little evaporation and therefore toxicity is highly increased. This not only means potentially severe contamination for fish, fowl and fur-bearing creatures, but possible “long term” contamination of water and soil as well.
In fact, there are actually over 160 different oils traded on the market theses days, but for simplicity’s sake, let’s discuss the three primary oils that get most of the serious attention in the news and in the markets.
West Texas Intermediate (WTI) is an extremely high quality crude oil which is greatly valued for the fact that it is of such premium quality, more and better gasoline can be refined from a single barrel than from most other types of oil available on the market.
The WTI “API Gravity” is 39.6 degrees, which makes it a “light” crude oil, with only 0.24 percent sulfur, which makes it a “sweet” crude oil. The term “API Gravity” refers to
the “American Petroleum Institute Gravity, which is a measure that compares how light or heavy a crude oil is in relation to water. If an oils “API Gravity” is greater than 10 then it is lighter than water and will float on it. If an oils “API Gravity” is less than 10, it is heavier than water and will sinks.
These combined qualities as well as location make WTI a prime crude oil to be refined in the United States, which is by far, the largest gasoline consuming country on the planet. The vast majority of WTI crude oils are refined in the Midwest and Gulf Coast regions. Even with production of WTI crude oil in decline, WTI is often priced from $5 to $7 higher per barrel than “OPEC Basket” oil and on average, $1 to $2 higher per barrel than “Brent Blend” oils.
Brent Blend is actually a combination of different oils from 15 fields throughout the Scottish Brent and Ninian systems located in the North Sea. Its “API Gravity” is 38.3 degrees, which makes it a “light” crude oil, but clearly not quite as “light” as WTI. It also contains about 0.37 percent sulfur, which makes it a “sweet” crude oil, but then again, not quite as “sweet” than WTI.
Brent Blend is quite excellent for making gasoline and middle distillates, both of which are utilized in large quantities in Northwest Europe, where Brent blend crude oil is most often refined. Brent Blend production, much like that of WTI, is also on the decline, but it remains a major benchmark for other crude oils in Europe or Africa. Brent Blend oil price is often priced at a $4 higher per barrel compared to the OPEC Basket price.
OPEC Basket oil is a collective seven different crude oils from Algeria, Saudi Arabia, Indonesia, Nigeria, Dubai', Venezuela and the Mexican Isthmus. The acronym OPEC stands for “Organization of Petroleum-Exporting Countries” which is an organization that was formed in 1960 in order to create some common policy for the production and sale of oil within its jurisdiction.
Because OPEC oil has a much higher percentage of sulfur within its natural make-up and therefore is not nearly as “sweet” as WTI or even Brent Blend and since it is also not naturally as “light” as well, the prices of OPEC oil are normally consistently lower than either Brent Blend or WTI. However, OPEC’s willingness or ability to quickly increase production when necessary makes OPEC a consistent “Major Player” in the oil industry!