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Almost everyone with access to the popular media knows of the spike in current oil prices. Oil prices have risen to levels never [link widoczny dla zalogowanych] before seen. These oil prices refer to the prices of oil commodities and prices are stated in cost per gallon of oil. This cost is for each gallon of crude [link widoczny dla zalogowanych] oil. The cost of oil-derived products such as gasoline, diesel, and hydrocarbon products for manufacturing has risen as well. That is because the cost of refining this more expensive crude oil is added to the crude cost, and passed on to the consumer.
One might assume that the current [link widoczny dla zalogowanych] oil price is simply the cost involved in removing oil from the [link widoczny dla zalogowanych] ground, plus a small profit. Unfortunately, that is only the beginning of today's oil prices. The steps in the oil production process include exploration, drilling, transportation, refining, distribution, and many others. Each step increases the oil prices, which are passed on to the consumers. It might be proper to say that current [link widoczny dla zalogowanych] oil prices are based as much on investors' hopes and fears as much as on the actual production costs.
Currently, oil prices affect both consumers and [link widoczny dla zalogowanych] businesses in a negative way. The consumer may be paying two to three times the [link widoczny dla zalogowanych] oil prices of a [link widoczny dla zalogowanych] few years ago, or even more. Businesses, especially those in transportation, are having their profits cut by currently high oil prices. This end-user effect causes the consumers to spend more on oil and less on other things, sometimes creating a vicious cycle in the financial [link widoczny dla zalogowanych] markets.
Oil prices begin with [link widoczny dla zalogowanych] the costs for exploration for oil reserves. Crude oil forms in extremely inaccessible locations, often several miles below the surface of the Earth. These oil reserves must be drilled, and the oil transported to refineries. Refineries distill the crude oil into different fractions, such as unleaded gasoline, diesel, heating oil, and No. 2 fuel oil. Even the residue such as the thick No. 6 fuel oil has [link widoczny dla zalogowanych] a market. Each step in the oil production process increases the oil prices for the end buyer.
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