Interesting facts about the UKBRENT (Brent Crude Oil)
According to archeological excavations, oil has been known from the time of around 6000 BC. It was discovered and used in construction as a material that binds blocks.
The widespread use of oil began in the second half of the 19th century thanks to a new method of oil extraction, using drilling wells. During the oil refining process, producers obtain several types of products. The main ones are plastics, gasoline, asphalt, kerosene, paraffin, and diesel fuel. In the age of industrialization and trade expansion, the demand for oil as an energy resource and its derivatives is increasing.
As was mentioned above, Brent Crude comes from deposits in the North Sea located between the Shetland Islands and Norway. From there, it passes through an underwater pipeline to the Sullom Voe oil terminal on the continent and is transported further by tankers. Before the construction of the pipeline and the terminal in 2006-2007, the oil from the North Sea was loaded onto tankers from loading islands, like Brent Spar. Such transportation added expenses to the oil companies and increased fear among investors due to the possibility of supply disruptions.
Currently, the declining inventories in developed countries, rising demand, and mistrusts concerning OPEC production confirm forecasts of rising crude oil prices.
According to the Wallstreet Journal, a barrel hasn't cost as much as now since the summer of 2014. Early in the pandemic, prices fell to unprecedented depths because of the crisis and fortunately ended last year when crude prices gained back more than 50%.
The quotes of the benchmark barrel have added about 13% during the first month of 2022. The Brent сrude producers have been rewarded by investors for the first time since the market was flooded with shale oil before the bust. Meanwhile, the drilling costs are rising due to labor and material inflation, which reduces competition opportunities.
