Oil prices are maintained like many other items on the market, supply and demand. If there are delays in pumping or quotas are not being met then the price shoots up. Things that can cause delays or slower pumping are a buildup of paraffin crystals in the pumping lines and tanks. This is why paraffin removal oil wells are such a necessity.
Paraffin crystals form as the oil cools to a certain temperature. The cooling allows crystallization which attaches its self to the metal shafts of which the oil runs through. This can lead to clogging of pipes and an obvious lower pump rate due to smaller capacity through way of the pipes.
In order for oil pumping to be lucrative you need to be able to pump not just quality but quantity too. If your quality is bad and your quantity high, you will make your sales but at much lower rates than what you could if the quality was good. If you're pumping high quality oil but low volumes you will not have enough sales to validate the pumps.
One could say that these oil producing countries have the market well positioned being able to increase pricing as and when they choose. For this reason there have been some regulations put in place to avoid abuse of the substance and the pricing involved. Companies have tried placing their prices too high which ends up in others boycotting the purchase from that specific company. After which prices soon drop again.
However, this natural resource is quickly fading. It has been scientifically noted that pumping for oil will, in the not so distant future, become harder as the oil becomes scarcer. Oil is formed by rotting vegetation in the earth's cavities. This takes a long time to change from its original form to oil. So it's not something that can simply be farmed.
There is also the likes of the industrial grade products. These are items that can use a somewhat lower grade of crude oil. Things like fuel, for instance diesel and even biodiesel do not necessarily require a high grade or pure crude. For this instance you may find that the crude used here has either been recycled or pumped where there has been a buildup of particles from the cooling of oil and the climate changes.
As with any raw material and natural resource there are different grades of crude oil. The grade and quality is partly affected by the location in which it was pumped and the quantity available to pump, in that specific area. The different grades will determine the value of it as well as what the oil will be used for. You won't get low quality being used in personal care or pharmaceutical products.
Rest assured that the companies pumping oil know what they are doing. It is in their best interest to pump not just quantity but quality too. Everyone can do their part in reducing the consumption of oil needed. One way to do this would be to be more fuel savvy and not drive everywhere, especially if it is in walking distance. Carpooling is also a great idea.
Paraffin crystals form as the oil cools to a certain temperature. The cooling allows crystallization which attaches its self to the metal shafts of which the oil runs through. This can lead to clogging of pipes and an obvious lower pump rate due to smaller capacity through way of the pipes.
In order for oil pumping to be lucrative you need to be able to pump not just quality but quantity too. If your quality is bad and your quantity high, you will make your sales but at much lower rates than what you could if the quality was good. If you're pumping high quality oil but low volumes you will not have enough sales to validate the pumps.
One could say that these oil producing countries have the market well positioned being able to increase pricing as and when they choose. For this reason there have been some regulations put in place to avoid abuse of the substance and the pricing involved. Companies have tried placing their prices too high which ends up in others boycotting the purchase from that specific company. After which prices soon drop again.
However, this natural resource is quickly fading. It has been scientifically noted that pumping for oil will, in the not so distant future, become harder as the oil becomes scarcer. Oil is formed by rotting vegetation in the earth's cavities. This takes a long time to change from its original form to oil. So it's not something that can simply be farmed.
There is also the likes of the industrial grade products. These are items that can use a somewhat lower grade of crude oil. Things like fuel, for instance diesel and even biodiesel do not necessarily require a high grade or pure crude. For this instance you may find that the crude used here has either been recycled or pumped where there has been a buildup of particles from the cooling of oil and the climate changes.
As with any raw material and natural resource there are different grades of crude oil. The grade and quality is partly affected by the location in which it was pumped and the quantity available to pump, in that specific area. The different grades will determine the value of it as well as what the oil will be used for. You won't get low quality being used in personal care or pharmaceutical products.
Rest assured that the companies pumping oil know what they are doing. It is in their best interest to pump not just quantity but quality too. Everyone can do their part in reducing the consumption of oil needed. One way to do this would be to be more fuel savvy and not drive everywhere, especially if it is in walking distance. Carpooling is also a great idea.
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