What exactly is a Barrel of Oil?
We keep hearing that the cost of a barrel of crude oil rises and falls and as it does the whole world shudders. Today we almost enjoy filling up the car, but then we pick up the paper to see companies trimming back because cheap oil to them means a production crisis. Through it all the news talks barrels, but what exactly is a barrel?
First of all in oil terms it is American, and not to be confused with the imperial measurements. There are 42 US gallons in a barrel, that’s an inconvenient 158.98722 litres, and the contents, when petroleum products or alcohol, are referenced at 16 degrees Celsius. In the 1860’s oil in the Pennsylvania fields was collected in whatever they had at hand, clearly something needed to be standardised. They pick up some old English wine barrels and that was that. The gasoline oil drum carries a further 13 US gallons.
But what exactly do you get from a barrel of crude? To start off to further confuse things you get an extra 6.43 gallons on top of the 42. This is due to additional elements, such as alkylates, that are added during the refining process. Crude oil varies but a typical barrel* is expect to yield a little over half (51.4%) as petrol, then there’s 15.3% diesel, 12.3% jet fuel, gas 5.4% and coke at 5%.
The barrel isn’t yet finished, residual fuel oil, the stuff that drives heaters makes up 3,3% and LPG is a further 2.8%, asphalt lubricants and other refined products make up the remaining 4.1%. A barrel of oil is a bit like a Chinese chicken, every part is used for something.
So if it produces 51.6% in petrol that’s 94.6 litres of petrol from a barrel which cost, in total, recently $50. When you consider that about 60% of what you pay at the pump in the UK and Denmark is tax, you start to see why the industry is presently looking down the butt of a barrel.