ACKNOWLEDGEMENT

The satisfaction that accompanies the successful completion of any task would be incomplete without mentioning people who made it possible, whose encouragement and consistent guidance crowned my efforts with success. I would like to express our heartfelt indebtedness and deep sense of gratitude to my external guide DR. ANIL KUMAR SWAIN and my faculty guide for sharing his knowledge and giving us guidance and generous co-operation. Finally, I thank all those who have directly or indirectly helped me in my project. I express my profound thanks to my teachers as well as my friend who are the constant source of encouragement for !.

"ate# )lace#

$th april, %&'( *hubaneswar

CERTIFICATE
This is to certify that the project work incorporated in the project report entitled A PROJECT REPORT ON CRUDE OIL IN INDIAN COMMODITY MARKET + is a project work carried out by Miss. A B MARY SRIDHARA, student of work is .riginal .F.,. "epartment of ,ommerce, -tkal -niversity. This

DR. ANIL KUMAR SWAIN )./ "ept of ,ommerce -tkal -niversity

DECLARATION

I do hereby declare that the project entitled 0 A PROJECT REPORT ON CRUDE OIL IN INDIAN COMMODITY MARKET is an authentic piece of work done by me under the guidance of guide "1. ANIL KUMAR SWAIN, it has neither been published nor submitted any where beforehand.

A B MARY SRIDHARA Roll no.33706V123001

,1-"! .I2 ,rude oil is a yellowish black mineral oil that is extracted from under the surface of the earth. This oil is consists of a number of hydro carbon compounds as it is formed from the million of years old animal and plant remnants. This mixture of hydrocarbons remains in the li3uid form under the normal atmospheric temperature and when distilled, a number of by-products can also be extracted. ,rude oil is also an important ingredient of some medicines due to the curing properties it has. ,rude oil can be of different types depending upon its origin and its relative weight. *rent crude oil is one of the most important types of crude oil and it is also considered as a benchmark in the context of the price fixation of the other types. *rent crude oil is a lighter type crude oil possessing 4)I 54merican )etroleum Institute6 gravity of 78 to 79 units and having medium levels of sulfur.

O !" i!# .il is the single most important commodity that holds the position of a key factor in each and every economy of the world. The world:s richest nations are at their current positions just because of the oil factor. The importance of oil has reached such a level at which there is no country in the world, which doesn:t need oil and its by-products, and if somehow it doesn:t have much reserves of oil to meet their domestic demand, these nations are ready to import the product at any cost. any nations have a huge share of their earnings constituted by oil exports only. !very industry re3uires oil to function properly either directly or indirectly as

both crude oil and its by-products serve as their inputs. The extent of the commodity:s importance was shown to the world when the world:s most strong economies were shaken up as the oil prices shot up in '9$7 and '9$9 when the gulf countries refused to supply oil to the countries that were the supporters of Israel in its war with !gypt and ;yria. ,rude oil alone bears <&= share to meet the global energy needs in the current scenario. The reason for this high share in the primary energy consumption in the world is due to the advantages that oil has over the other constituents of primary energy such as diverse application, comparatively lesser harm to the environment, easy handling, lower capital costs and above all higher efficiency. ,rude oil reserves on earth are estimated to be more than ' trillion barrels that are mostly found in the iddle !ast, !astern !urope, 4frica and ,entral 4merica, iddle !ast being the top reserve holder. It is a clear fact that oil is a limited resource and would finish off in a maximum of 8& years if the current rate of consumption continues. .f these ' trillion barrels, the world produces around $> million barrels per day. The largest crude oil producing country is ;audi 4rabia followed by 1ussia and -nited ;tates of 4merica. The refining capacity of oil in the world as in %&&% was ('<< million tons. The consumption of crude oil in the world has been rising with the change in time and the technological improvements that are accompanying it. .il is consumed all over the globe, consumption figures standing at $< million barrels per day and -nited ;tates of 4merica consumes the maximum level of oil in the world. The major consumer countries of crude oil along with their consumption figures pertaining to the year %&'7 are -nited ;tates of 4merica 5%&.$ million barrels?day6 ,hina 5<.> million barrels?day6 @apan 5>.( million barrels?day6 /ermany 5%.< million barrels?day6 1ussia 5%.< million barrels?day6 India 5%.7 million barrels?day6

,anada 5%.7 million barrels?day6 *raAil 5%.% million barrels?day6 ;outh Borea 5%.' million barrels?day6 France 5%.& million barrels?day6 exico 5%.& million barrels?day6 1egarding the world trade situation, one important aspect is the presence of an organiAation namely .)!, that controls and regulates the exports and imports of most of the countries of the world. .)!, stands for C.rganiAation of )etroleum !xporting ,ountries: and the members include all the '' major crude oil producing countries and nations that are highly dependent on the revenues from oil and oil products. 4s a matter of fact, .)!, nations have $>= of the world:s total crude oil reserves of ' trillion barrels and control around (&= of the world oil production. .)!, member countries also dominate the world exports of crude oil contributing to >>= of the total world exports.

The major crude oil exporting countries with their exporting figures are

;audi 4rabiaD 58.$7 million barrels per day6 1ussia 5<.<$ million barrels per day6 Eorway 5%.9' million barrels per day6 IranD 5%.>> million barrels per day6 FeneAuelaD 5%.7< million barrels per day6 -nited 4rab !miratesD 5%.77 million barrels per day6 BuwaitD 5%.%& million barrels per day6 EigeriaD 5%.'9 million barrels per day6 exico 5'.8& million barrels per day6 4lgeriaD 5'.<8 million barrels per day6 Ira3D 5'.(8 million barrels per day6 2ibyaD 5'.7( million barrels per day6 BaAakhstan 5'.&< million barrels per day6 GatarD 5'.&% million barrels per day6 In the above list, the countries with the D sign are the member countries of .)!,. The imports of crude oil are generally done by the countries, which do not have appropriate reserves of oil and are incapable of satisfying the domestic consumption demand. The following is list of the countries with their net import figures that are the major importers of crude oil in the world -nited ;tates of 4merica 5'%.' million barrels per day6 @apan 5>.7 million barrels per day6 ,hina 5%.9 million barrels per day6 /ermany 5%.( million barrels per day6 ;outh Borea 5%.% million barrels per day6 France 5'.9 million barrels per day6 Italy 5'.$ million barrels per day6 ;pain 5'.< million barrels per day6

India 5'.> million barrels per day6 Taiwan 5'.& million barrels per day6

Glo$%l S&!n%"io

/lobal proven oil reserves in %&'' was around '<>%.< thousand million barrels, of which the .)!, had ''9<.7 thousand million barrels. ,rude oil accounts for 77= of the worldHs primary energy consumption. /lobal oil demand was 88.7 million barrels per day 5mmb?d6 in %&'', an increase of around &.$= from the previous year. In %&'&, 1ussia, ;audi 4rabia, the -; and Iran were the top oil producing countries. 4lthough the -; is the worldHs third largest oil producing nation, it is the worldHs largest consumer and importer of oil followed by ,hina, @apan and India.

His'o"(

The various types of crude oils are classified according to their geographical originations, sulfur level and also the density of the oils in some cases. For differentiation depending upon the gravity of oils, the 4merican )etroleum Institute 54)I6 provides with a basis to measure it:s density, which is called the 4)I gravity. The crude oils are then termed as Cheavy: or Clight: oil. They are also divided as per the sulfur level present in them, as Csweet: or Csour:. *ut, mostly, crude oil is classified on the basis of location only as oils from different locations have different characteristics and they are also named after the places of origin. The main types of crude oil according to their geographic locations are

Eorth ;ea ,rudes I ,onsidered as bench mark 4)I gravity I around 78.> degrees ;ulfur level - &.7<= !xamples - *rent, Forties, .sberg, Eorth ;ea *asket, !kofisk, ;tatfjord and Flotta Jest 4frican ,rudes I 4)I gravity - around 7> degrees ;ulfur level I &.%= !xamples - *onny 2ight, Gua Iboe, *rass 1iver, !scravos, Forcados and ,abinda )ersian /ulf ,rudes I 4)I gravity Iaround 7$ degrees ;ulfur level I '.&8= !xamples - "ubai and .man assessments, marine and *anoco 4rab -nited ;tates ,rudes I 4)I gravity I variable, around 79.< degrees ;ulfur level I variable, around &.%(= !xamples - Jest Texas Intermediate 5JTI6, ars ., and ars, ) - )lus JTI, JTI ,alendar "elta, Jest Texas ;our 5JT;6, 2ight 2ouisiana ;weet 522;6, Leavy 2ouisiana ;weet 5L2;6, !ngene Island, Jyoming ;weet, *onito, 4sia )acific ,rudes I !xamples - Tapis, *elinda, ,ossack, @abiru, Eorth Jest ;helf, iri etc ars, )oseidon, *asrah 2ight, 4laska Eorth ;lope 54E;6, 2ine <7, )-)lus 2ine <7, Thums, Bern 1iver edium urban, 2ower Kakum, Gatar 2and, Gatar

C")*! oil +"o*)&in, &o)n'"i!s

The following is the production wise list of major crude oil producing countries of the world ;audi 4rabiaD 1ussia -nited ;tates IranD exico ,hina Eorway ,anada FeneAuelaD -nited 4rab !miratesD BuwaitD EigeriaD -nited Bingdom Ira3D The countries with D sign are the current members of .)!,. ;audi 4rabia is the leading producer of crude oil with the production figures of '&.7$ million barrels per day. The country is followed by 1ussia with 9.%$ barrels and -nited ;tates with 8.<9 barrels of production. The total produce of crude oil in the world is $> million barrels per day with the total reserves of crude oil estimated to be ' trillion tons. These reserves would finish off in around 8& years with the same rate of consumption. The .)!, nations provide around 7& million barrels per day that accounts to approximately (&= of world production. Production of crude oil in India India is not among the major producers of crude oil, as it doesn:t have much oil reserves. That is why it generally depends on imports of crude oil from other countries. Lowever, the production of oil and as a result the production of its by-products in India has increased in the

recent past due to exploration and findings of new oil reserves. India currently has an estimated 3uantity of >.( billion barrels of oil reserves out of which it produces around &.8 million barrels per day. 4t this production level, the oil reserves in India would last for around %9 years. The major oil reserves of the country are situated at umbai high 5 umbai6 -pper 4ssam 54ssam6 ,ambay 5/ujarat6 Brishna-/odavari basin 54ndhara )radesh6 ,auvery basin 5Tamil Eadu6 Eagaland 4runachal )radesh The largest crude oil producing oilfield is the umbai high field that produces around %<&&&& barrels per day. 4mong these production centers, major share of production i.e. %?7rd share is bagged by the offshore reserves as compared to onshore reserves. The refining capacity of crude oil in India is over %.' million barrels per day. The refining sector in India is held by both public and private sector, public sector being the dominating one. In*i%n &")*! oil -%".!' India is one of the non-.)!, countries much dependent on its imports to fulfill the domestic consumption demand as it has a much lower level of production. India is a developing country and the re3uirement for the oil as a primary energy constituent from the industries in the country is at its peak. The country has much depended on coal to satisfy its energy needs in the earlier times but the use of crude oil and gas is taking over the dominance of coal with the change in time. .il and gas contribute to around (>= of the country:s total energy consumption. India has around >.( billion barrels of oil reserves with it and the domestic production has increased in the recent past to reach the &.8 million barrels per day mark. umbai high is the

largest oil-producing oilfield in India with a production of %.< lakh barrels per day. The refining capacity of crude oil in India is estimated at around %.' million barrels per day. 1egarding the consumption pattern of oil in India, it is the <th largest consumer country in the world having a consumption of %.% million barrels per day. This leaves the country with a huge deficit in the demand-supply scenario and thus $&= of the consumption is met through imports. India generally imports .man-"ubai sour grade crude, *rent dated sweet crude and *onny light crude. The country imports over '.> million barrels per day that place it at the 9th position among the largest importers of the world. Though the Indian production has increased in the recent times, the imports were raised by >= making due to the raised Indian demand of around (.%=.

The countries from which India imports crude oil are FeneAuela Eigeria ;udan Iran Buwait The Indian oil-refining sector has been regulated by the government historically and is still dominated. 4 new private sector has emerged after the loosening of control by the government. The major units pertaining to the oil sector in India are Indian .il ,orporation 5)ublic sector6 .il and Eatural /as ,orporation 5)ublic sector6 1eliance India 2td 5)rivate sector6 !ssar .il 1efinery 5)rivate sector6 *harat )etroleum ,orporation 2td 5)ublic sector6

Lindustan )etroleum ,orporation 2td 5)ublic sector6 anglore 1efineries and )etrochemicals 2td 5)ublic sector6 Market Influencing Factors )roduction of the major oil producing countries Farious climatic or political supply fluctuations Jorld oil demand Fluctuations in the value of dollar Imports from various world oil organiAations like 4)I, ".! 1efinery fire

M%/o" '"%*in, &!n'!"s o0 &")*! oil The major trading centers of crude oil in the world are Eew Mork ercantile !xchange 5EM !N International )etroleum !xchange of 2ondon 5I)!6 Tokyo ,ommodity !xchange 5T.,. 6 In*i%n S&!n%"io .il accounts for %9= of IndiaHs total energy consumption and there seems to be no possibility of scaling down the dependence on these fuels. ,rude oil production during the period 4pril- arch %&'% 5provisional6 was 78.'9 million metric tonne 5 year. The total oil consumption in %&'& was around 7.7( mmb?d. India is the fourth largest consumer of oil and imports more than $&= of its crude oil re3uirement. T6, as compared with 7$.$' T during the corresponding period last

IndiaHs refining capacity stood at '97.79 is in the public sector, <.&&

T)4 on @anuary ', %&'% of which ''<.89 T)4 in the

T in joint ventures, and the balance $&.>&

private sector. ,rude oil is a complex mixture of various hydrocarbons found in the upper layers The /overnment of ,rude India realised the need to explore areas of the earthHs crust. oil is often attributed as themore 0 other ofand all has implemented Eew ,ommodities+ because of its importance in the manufacturing of a wide variety of materials. ,rude oil accounts for 7>= of the worldHs primary energy consumption. ,rude oil is used to produce fuel for cars, trucks, airplanes, boats and trains. It is also used for a wide variety of other products including asphalt for roads, lubricants for all kinds of machinesO plastics for toys, bottles, food wraps, among others

.il accounts for %9= of IndiaHs total energy consumption and there seems to be no possibility of scaling down the dependence on these fuels. ,rude oil production during the period 4pril- arch %&'% 5provisional6 was 78.'9 million metric tonne 5 T6, as compared with 7$.$' T during the corresponding period last year. The total oil consumption in %&'& was around 7.7( mmb?d. India is the fourth largest consumer of oil and imports more than $&= of its crude oil re3uirement. IndiaHs refining capacity stood at '97.79 ''<.89 $&.>& T is in the public sector, <.&& T)4 on @anuary ', %&'% of which T in joint ventures, and the balance

T)4 in the private sector. The /overnment of India realised the need to

explore more areas and has implemented Eew !xploration 2icensing )olicy 5E!2)6, according to which '&&= F"I is permitted for small and medium siAed oil fields through competitive bidding

INDIAN RE1INERIES
I.,2 5 athura, )anipat, *arauni, etc *),2 5 umbai6 L),2 5FiAag, umbai6 ,),2 5 anali and Earimanam6 1)2 5 angalore6 *1)2 54ssam6 1)2 5@amnagar6 E12 5Eumaligarh6 B12 5,ochin) I.,2 is India:s largest oil refinery company. 1)2:s @amnagar refinery is the largest refining in India and the third largest in the world

 The /overnment of India has permitted foreign participation in oil exploration, an activity restricted earlier to state owned entities. !ven after officially dismantling 4dministered )rice echanism 54) 6, the product prices continue to be policy driven rather than market driven. The petroleum refining and marketing sector is undergoing a huge restructuring with influx of foreign direct investments thus facilitating more efficient markets in times to come. PRICE MO2ING 1ACTORS .)!, output, supply and spare capacities Jeather conditions Increased demand from emerging and ;peculative buying and selling developing countriesO geopolitics ,hanges in the refining sector, for example, a -; crude and products inventories data drop in the refinery utilisation rate

,urrency fluctuations

,rude oil is a naturally-occurring substance found in certain rock formations in the earth. To extract the maximum value from crude, it needs to be refined into petroleum products. The best-known of these is gasoline, or petrol. .thers include li3uefied petroleum gas 52)/6, naphtha, kerosene, gas oil and fuel oil. .il wells are used to release the oil from within the earth. ;ome of the earliest developed oil wells were drilled in ,hina using bamboo poles. These oil wells were developed in 7($ 4.". for the sole purpose of providing enough fuel to create a thriving salt industry. *y the '9>&s, crude oil became a global energy source, which in effect killed the whaling industry by making whale oil obsolete. In the crude oil industry, there are oil names 5such as *rent 2ight ,rude .il and *onny 2ight6 and there are oil types 5such as light, heavy, sweet and sour6. 2ight oil has a low density viscosity, while heavy oil is of higher density. ;weet oil has less sulfur, and sour oil has excessive sulfur. The world market prefers light, sweet crude oil, largely because it re3uires less refinement and production time before going to market. 5Find out how to stay on top of data reports that could cause volatility in these markets in Become An Oil And Gas Futures Detective .6

4 sample commodity futures contract for crude oil is shown in the following table. C")*! Oil Con'"%&' S+!&i0i&%'ions Ticker ;ymbol ,ontract ;iAe .pen .utcry# ,2 5EM !N6 ',&&& -.;. barrels 5(%,&&& gallons6

"eliverable /rades ;pecific domestic crudes with &.(%= sulfur by weight or less, not less than 7$ degrees 4)Igravity nor more than (% degrees 4)I gravity. The following domestic crude streams are deliverable# Jest Texas Intermediate, 2ow ;weet ix, Eew exican ;weet, Eorth Texas ;weet, .klahoma ;weet and ;outh Texas ;weet. ;pecific foreign crudes of not less than 7( degrees 4)I nor more than (% degrees 4)I. The following foreign streams are deliverable# -.B. *rent, for which the seller shall receive a 7& cent per barrel discount below the final settlement priceO Eorwegian .seberg *lend is delivered at a >> centsIperIbarrel discountO Eigerian *onny 2ight, Gua Iboe, and ,olombian ,usiana are delivered at '> cent premiums. ,ontract onths 4ll months EM !N .pen .utcry# onday-Friday 9am%#7&pm !;T e,*.T !lectronic# ;unday-Friday <pm>#'>pm ,;T Trading Lours

2ast Trading "ay Trading terminates at the close of business on the third business day prior to the %>th calendar day of the month preceding the delivery month. If the %>th calendar day of the month is a non-business day, trading shall cease on the third business day prior to the business day preceding the %>th calendar day.

2ast "elivery "ay 4ll deliveries are ratable over the course of the month and must be initiated on or after the first calendar day and completed by the last calendar day of the delivery month. )rice Guote Tick ;iAe "ollars and cents per barrel. EM !N# ' cent per barrel 5P'&.&& per contract6 '. P'& per barrel 5P'&,&&& per contract6 for all months. If any contract is traded, bid or offered at the limit for five minutes, trading is halted for five minutes. %. Jhen trading resumes, the limit is expanded by P'& per barrel in either direction. If another halt were triggered, the market would continue to be expanded by P'& per barrel in either direction after each successive fiveminute trading halt. 7. There will be no maximum price fluctuation limits during any one trading session. Un*!"s'%n*in, C")*! Oil Con'"%&'s 2ike every commodity, crude oil has its own ticker symbol, contract value and marginre3uirements. To successfully trade a commodity, you must be aware of these key components and understand how to use them to calculate your potential profits and loss. For instance, if you choose to buy or sell a crude oil futures contract, you will see a ticker tape handle that looks like this# CL3K 4 567.78 This is just like saying Q,rude .il 5,26 %&&8 586 ay 5B6 at P'&>.>%?barrel 5'&>.>%6.Q 4 trader buys or sells a crude oil contract according to this type of

"aily )rice 2imit 5Eot applicable in electronic markets6

3uotation.

"epending on the 3uoted price, the value of a commodities contract is based on the current price of the market multiplied by the actual value of the contract itself. In this instance, the crude oil contract e3uals the e3uivalent of ',&&& barrels multiplied by our hypothetical price of P'&>.>%, as in# P'&>.>% x ',&&& barrels R P'&>,>%& ,ommodities are traded based on margin, and the margin changes based on market volatility and the current face value of the contract. To trade a crude oil contract on theEew Mork ercantile !xchange 5EM !N6 a trader may be re3uired to maintain a margin of P8,$$>, which is approximately 8= of the face value. The margin amount will change in different market conditions, but the amount of leverage provided by the futures markets makes it attractive for investors looking to gain exposure to oil prices. C%l&)l%'in, % C9%n,! in P"i&! *ecause commodity contracts are customiAed, every price movement has its own distinct value. In a crude oil contract, a one-cent move is e3ual to P'&. Jhen determining EM !NHs crude oil profit and loss figures, you calculate the difference between the contract price and the exit price, and then multiply the result by P'&. For example, if prices move from P'&>.>% to P''&.87, you multiply the difference, which is P>.7', by P'& to yield a contract value change of P>,7'&. : B)( S!ll P''&.87 To'%l 2%l)! >7' cents P>,7'& or

,rude .il ,ontract P'&>.>% )rice 5' cent move R P'&6

C")*! Oil E;&9%n,!s Futures contracts for crude oil are traded at the Eew Mork ercantile

!xchange 5EM !N6,Intercontinental !xchange 5I,!6, "ubai !xchange 5" !6,

ercantile

ulti ,ommodity !xchange 5 ,N6, IndiaHs Eational

,ommodity and "erivatives !xchange 5E,"!N6 and the Tokyo ,ommodity !xchange 5T.,. 6. 1%&'s A$o)' P"o*)&'ion .ne barrel of crude oil is the e3uivalent of (% -.;. gallons. 4fter the barrel of oil is refined, it yields approximately %& gallons of motor gasoline and seven gallons of diesel. Jith an additional '$ gallons of petroleum byproducts, such as propane, ammonia and plastic materials, the total refining process has a net gain of two gallons - (% gallons go inO (( gallons come out. 4s mentioned, the types of crude oil are light? heavy and sweet? sour. 2ighter, sweeter crude is in more demand globally, but is becoming increasingly difficult to access. This has caused many investors on Jall ;treet to 3uestion how much oil is actually being pumped from reserves versus how much oil is being used. !merging economies in both ,hina andIndia have added to this intense debate. In %&&(, annual worldwide oil consumption was 7& billion barrels. This would not have been controversial, except that new discoveries during the same time had fallen to eight billion barrels. *y %&&>, worldwide demand for oil had reached 7' billion barrels, leaving worldwide emergency stockpiles nearly depleted for 7$ days. Jhile ;audi 4rabia, 1ussia, and the -.;. are the top oil producing countries in the world, they are having more difficulty meeting demands. ,urrently, <%= of the worldHs accessible oil can be found in the centered around five countries# ;audi 4rabia, -nited 4rab iddle !ast,

!mirates, Gatar, Ira3 and Buwait. The fact that a protracted war on terror in Ira3 has halted production to a fraction of what it used to be is important to take into consideration. 4lso understand that Gatar shares a natural gas field with Iran, considered by the -.;. as part of the axis of evil, so two out of the five iddle !ast countries are not producing at full capacity. 5Jhen the price of oil goes up, donHt worry about how much gas is going to costO get even by making a play on the ,anadian dollar. Find out how in Canada's Commodity Currency: Oil And The Loonie.6 1%&'o"s T9%' In0l)!n&! C")*! Oil<s P"i&! The price is influenced by the following factors#

For the past >& years, the price of crude oil has been denominated in -.;. dollars. Jith the fluctuation in the value of the -.;. dollar and the prominence that newer currencies such as the euro are gaining, .)!, is considering switching crude oil from a -.;. dollar 3uotation system to either the euro or to a basket of multiple currencies. This could have an adverse affect on oil prices in the short run. In '9><, geophysicist . Bing Lubbert made the dire prediction that oil would reach apeak production level, flatten out, and eventually decline following a bell curve pattern of distribution. !ventually, the world would deplete all of the available oil. The peak, as calculated by Lubbert, was alleged to have been hit in '9$&. ;ince then, peak oil predictions have been readjusted to account for current usage versus what is being pumped from the ground. 5For more on this phenomenon, see Peak Oil: What To Do When The Wells un Dry.6 4lternative methods of oil development are gaining prominence. .il shale and tar sands are becoming viable oil producing sources. 4s the price of technology begins to decrease, these sources become more accessible to refiners. ethods for turning methane and coal into oil substitutes, first discovered in the '97&s and during JJII, are being explored again. 4ll of these alternatives have the opportunity to upset crude oil prices.

/lobal warming is considered an unintended conse3uence of using petroleum-based products. This has led to an aggressive move to develop green energy sources such as electric cars, fuel cells, ethanol, li3uid natural gas and others, in the hope that they can potentially reduce the worldHs reliance on crude oil. 4s these technologies become more common in the marketplace, they have the ability to displace crude oil.

Con&l)sion ,rude oil is a commodity that the %'st century inherited from the '9th century, with all of its benefits and drawbacks. .f all of the traded commodities, it has the broadest impact. Low the world interacts with the crude oil industry in the years to come will have a wide-reaching impact on the environment, the global economy and our daily lives.