Oil Price Per Barrel Today

How big is a barrel of oil?

The oil barrel is a unit of volume, not a physical container. Oil today moves by pipeline and tanker, not in wooden barrels. The 42-US-gallon standard dates from Pennsylvania in the 1860s, and the industry formalised it in 1872.

From barrel price to pump price

A useful rule of thumb: every $1 change in the price of a barrel changes the cost of crude in each gallon by about 2.4 US cents ($1 ÷ 42), or about 0.63 cents per litre. Retail prices follow, usually with a lag of one to several weeks, and they tend to rise faster than they fall.

The U.S. Energy Information Administration splits the retail gasoline price into four parts. Crude oil is the largest, typically 50–60% of the pump price. The others are refining costs and margins, distribution and marketing, and federal and state taxes. In Europe, fuel taxes are much higher, so crude makes up a smaller share and price swings at the pump are smaller in percentage terms.

What one barrel of crude becomes

Refining increases volume: a 42-gallon barrel yields about 45 gallons of products, because the products are less dense than crude. EIA data for a typical US refinery shows roughly:

• about 19–20 gallons of motor gasoline
• about 11–12 gallons of diesel and heating oil (distillates)
• about 4 gallons of jet fuel
• the rest is heavy fuel oil, petroleum coke, asphalt, liquefied gases and petrochemical feedstocks

The difference between the value of these products and the cost of the crude is the refiner's margin, known as the crack spread. When crack spreads are wide, refiners buy more crude, which supports the barrel price.

Which barrel price is "the" oil price?

Headlines quote one of two futures prices: Brent (international) or WTI (US). Physical barrels of other grades trade at a premium or discount to these. Heavy, sour crudes such as Western Canadian Select or Urals usually sell well below Brent. Light, sweet grades such as Nigerian Bonny Light or Abu Dhabi's Murban often sell at or above it.