132
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
oils, which can be extremely problematic for setting monthly
official selling prices.
In summary, a benchmark crude oil (or a marker crude oil)
is a crude oil or crude blend that is freely traded on a selected
cash and futures market according to specified rules. West Texas
Intermediate is traded only in the New York Mercantile Exchange
in New York, and Brent crude oil is traded only in the International
Petroleum Exchange; while Dubai-Oman crude oil is traded in
Singapore.
However, much of the world crude oil trade does not involve
benchmark crude oils. The purpose of trading in the benchmark
is almost purely for monetary protection by energy industry users
of other crude oils against future price movements that would
harm their profit positions. In this sense, purchasing benchmark
crude is a form of protection on owned or promised inventory of
crude oil.
But while the two largest benchmarks, Brent and West Texas
Intermediate, are light and sweet, most of the world's crude trade
is in heavy sour crude oil. At best, the existing benchmarks provide some contra-price movement protection, but the Dubai-Oman
crude oil blend was established as a Middle East benchmark to
better estimate the market price for heavy, sour crude oil.
4.4 References
Aluko, ME. Shell, Nigeria and Oil & Gas Reserves Revision - Sloppiness or
Fraud? http://www.nigerdeltacongress.com/sarticles/shell_nigeria_
and_oil gas_reser. htm
ASTM D97. 2008. Standard Test Method for Pour Point of Petroleum
Products. Annual Book of Standards. American Society for Testing
and Materials. Philadelphia, Pennsylvania. Volume 05.03.
ASTM D4175. 2008. Standard Terminology Relating to Petroleum,
Petroleum Products, and Lubricants. Annual Book of Standards.
American Society for Testing and Materials. Philadelphia,
Pennsylvania. Volume 05.03.
BP 2008. BP Statistical Review of World Energy, www. bp.com/
statisticalreview.
Campbell, C.J. and Laherrère, J.H. 1998. The End of Cheap Oil. Scientific
American. 278: 78-83.
Speight, J.G. 2007. The Chemistry and Technology of Petroleum,
4
th Edition. CRC Press, Taylor & Francis Group, Boca Raton, Florida.
PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
oils, which can be extremely problematic for setting monthly
official selling prices.
In summary, a benchmark crude oil (or a marker crude oil)
is a crude oil or crude blend that is freely traded on a selected
cash and futures market according to specified rules. West Texas
Intermediate is traded only in the New York Mercantile Exchange
in New York, and Brent crude oil is traded only in the International
Petroleum Exchange; while Dubai-Oman crude oil is traded in
Singapore.
However, much of the world crude oil trade does not involve
benchmark crude oils. The purpose of trading in the benchmark
is almost purely for monetary protection by energy industry users
of other crude oils against future price movements that would
harm their profit positions. In this sense, purchasing benchmark
crude is a form of protection on owned or promised inventory of
crude oil.
But while the two largest benchmarks, Brent and West Texas
Intermediate, are light and sweet, most of the world's crude trade
is in heavy sour crude oil. At best, the existing benchmarks provide some contra-price movement protection, but the Dubai-Oman
crude oil blend was established as a Middle East benchmark to
better estimate the market price for heavy, sour crude oil.
4.4 References
Aluko, ME. Shell, Nigeria and Oil & Gas Reserves Revision - Sloppiness or
Fraud? http://www.nigerdeltacongress.com/sarticles/shell_nigeria_
and_oil gas_reser. htm
ASTM D97. 2008. Standard Test Method for Pour Point of Petroleum
Products. Annual Book of Standards. American Society for Testing
and Materials. Philadelphia, Pennsylvania. Volume 05.03.
ASTM D4175. 2008. Standard Terminology Relating to Petroleum,
Petroleum Products, and Lubricants. Annual Book of Standards.
American Society for Testing and Materials. Philadelphia,
Pennsylvania. Volume 05.03.
BP 2008. BP Statistical Review of World Energy, www. bp.com/
statisticalreview.
Campbell, C.J. and Laherrère, J.H. 1998. The End of Cheap Oil. Scientific
American. 278: 78-83.
Speight, J.G. 2007. The Chemistry and Technology of Petroleum,
4
th Edition. CRC Press, Taylor & Francis Group, Boca Raton, Florida.