I saw the oil price zooming past US$120. It's really amazing how the oil price keeps going up. One strategist for Goldman Sachs predicted it will even reach US$200 per barrel. The intersting bit is that how do we measure oil barrels? I am recycling this entry which I wrote two years ago.
One of the interesting thing you find about Bruneians is that a lot of us don't know much about oil which is the lifeline of this country. Practically everything we touch in Brunei owes its existence to oil. And yet there is so much about the oil industry that we don't know. All we know now is that the world oil price is about US$70 per barrel. And yet ask this question - how do we export oil? It's priced in barrels. So, do we still use barrels to store oil and export it?
It is true that previously oil is stored in classic wooden barrels. In America, back in 1859, customers paid by the barrel, but there was no standard size. Different oil buyers would get different amounts when they filled up from the stock tank at the well. The barrel most commonly used for oil was 40 gallons, the same size as a whiskey barrel. As production increased, a standardized oil barrel became more important, both for businessmen and for government tax collectors. Some wells were putting out more than 3,000 barrels of oil per day, and coopers were producing large numbers of brand-new containers just for oil. At around the same time, the then American government enacted new tax laws to help finance the Civil War. A standard measure of oil helped the tax collectors make its collections.
By 1870, the oil barrel size was set at 42 gallons. And by then, oil was so cheap at 10 cents per gallon that the empty barrel cost as much as the oil. That helped to set the development of the first oil pipeline. At the same time, wooden tank cars and later steel tank barges start hauling oil through the traintracks and ships, each tank car holding around 80 barrels. With each development, the barrel became more and more obsolete. However, the 42-gallon barrel is still a standard unit of measurement in the oil industry. Other units, such as cubic meters or imperial gallons, can be converted to the U.S. barrel. Even though the 42-gallon barrels is no longer in use, companies still ship some oil in 55-gallon steel drums although the volumes for these are still given in 42-gallon "barrels."
I guess the next question would be - do you know how our oil people find oil?