The story
From carbon + oil. Coined in the early 1850s in Pennsylvania by Samuel Martin Kier, an American industrialist who refined crude petroleum into an illuminant. Kier chose a marketable name for his new lamp fuel to emphasize both its petroleum origin and its difference from whale oil. According to linguist Hans Kurath, this term may be heard from the western edge of the Alleghenies to beyond the Ohio line.
Etymology from Wiktionary, CC BY-SA 4.0.