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Whilst this may look like a oily tar pit or similar, it is actually made up of very fine-grained mud and clay minerals suspended in the hot water. The dark color comes from the minerals themselves, often including iron sulfides or other dark-colored compounds. The texture and the way the bubbles reflect light can give the impression of oil. This is due to the fine particles and the surface tension of the water creating a sheen. The bubbling is caused by gases (primarily carbon dioxide and hydrogen sulfide) escaping through the mud.
As the sun rose, the bubbles reflected the light and looked yellow.
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