Crude Oil is interesting and it defies the typical belief of an individual who thinks they know what crude oil actually is. Many remember the old movies with the crude shooting out of the oil rig. It was referred to as “black gold.”
But, surprisingly, crude oil is much more than “black gold”, in fact there are so many differences in crude, ranging from color, density, and consistency. It can range in color from light yellow to the darkest black. It can be very thin in consistency to extremely thick. These differences also vary based on geographical regions of not only a country, but the world!
Further, the crude oil varies dramatically in its viscosity, volatility and toxicity.
Viscosity directly relates to the oil’s function in flow. Crude oil with higher viscosity is more difficult to pump, transport and refine.
Volatility defines how quickly oil evaporates. High volatility will require steps being taken to reduce the loss of oil.
Toxicity….the “green” concern of oil. How does extracting the oil affect humans, animals and surrounding eco-systems. What inherent expenses will be required address these concerns.
Investing in crude oil can present significant upside and downside related to risk. But, it is an exciting investment market.