Sour Crude

Dictionary Says

Definition of 'Sour Crude'

The name given to barrels of crude oil that do not meet certain content requirements, including low levels of hydrogen sulfide and carbon dioxide. Petroleum is considered "sour" if the total sulfur level is greater than 0.5%. Sulfur is an impurity that has to be removed before oil can be refined, which increases the costs associated with processing. Often, sour crude oil is processed into heavy oil like diesel and fuel oil (instead of gasoline) to decrease processing expenses. For safety reasons, sour crude oil must be stabilized prior to being transported by oil tankers. This is achieved by removing the hydrogen sulfide gas (H2S).
Investopedia Says

Investopedia explains 'Sour Crude'

The world's major producer of sour crude is Venezuela. Other producers include Canada, the United States, Mexico, Columbia, Ecuador and several Middle Eastern nations. Petroleum is considered "sour" if it contains more than 0.5% sulfur (or 1% by certain definitions), and "sweet" if it contains less than 0.5% sulfur. The term "sweet" was originally used to describe the mildly sweet taste and agreeable smell of the low-sulfur sweet crude oil.

Crude oil is called "crude" because it contains many different hydrocarbon compounds. An oil refinery must separate the dozens of hydrocarbon compounds into separate chemical units, eliminate the contaminants and covert or transform the chemical units into gas. Refiners generally prefer sweet crudes because of the low sulfur content and relatively elevated yields of high-value products including gasoline, diesel fuel, heating oil and jet fuel.

The first sour crude oil futures began trading in June 1990 on the Singapore International Monetary Exchange. Many sour crude products have been launched and terminated due to lack of investor interest. Light sweet crude oil (WTI) futures and options, on the other hand, are the most actively traded energy products in the world. WTI helps manage risk in the energy sector because the contract has the most liquidity, highest number of customers, and excellent transparency. Both full-sized and e-mini futures contracts are traded on through the CME Group's CME Globex, CME ClearPort and Open Outcry (New York) trading venues.

Articles Of Interest

  1. Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  2. What Determines Gas Prices?

    Gas prices are influenced by more than supply and demand. Find out what determines the price you pay at the pump.
  3. What economic indicators are especially important to oil traders?

    Economic indicators are used by traders and investors in an attempt to understand the underlying fundamentals of the market. The specific economic indicators traders look at will often depend ...
  4. Futures Fundamentals

    For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work and why investors use them.
  5. How Interest Rates Affect The Housing Market

    Understand how rate changes can affect home prices, and learn how you can keep up.
  6. Uncovering Oil And Gas Futures

    Find out how to stay on top of data reports that could cause volatility in oil and gas markets.
  7. Trading Is Timing

    Learn how to make gains even if you don't get in at the right time.
  8. Leading Economic Indicators Predict Market Trends

    Leading indicators help investors to predict and react to where the market is headed.
  9. Exploring Non-Dollar Currencies For Forex Trading

    Learn how investments in foreign currencies can diversify your portfolio.
  10. Candlestick Charting: What Is It?

    Discover the components and basic patterns of this ancient technical analysis technique.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.
  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.
  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.
  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.
  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.
  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=3e84436b85afeab193f9584f552af3e9