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Report: Oil going through distillation tower not impacted by crude export ban

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Comments (103)
  • California Dividend Bull
    , contributor
    Comments (148) | Send Message
     
    Is that another way of telling us that the government is working on keeping our energy prices at high levels and thereby willingly continue the devastating Q1 economical figures we've been presented this week?
    27 Jun, 05:05 PM Reply Like
  • smurf
    , contributor
    Comments (4156) | Send Message
     
    I don't think the "devastating economical" (you did mean economic, right?) figures were the result of oil prices.

     

    The consensus is that it has to do with the ACA sucking the air out of the economy.
    27 Jun, 05:42 PM Reply Like
  • Macro Investor
    , contributor
    Comments (9050) | Send Message
     
    Consensus by who? Right wing pundits?
    28 Jun, 03:48 AM Reply Like
  • The Long Tail of Finance
    , contributor
    Comments (782) | Send Message
     
    Like it or not, the genie is out of the bottle and the ACA will pave the way for how we obtain our medical benefits in the future. It will serve as a template. I would just give it 5 years or so to settle down, get better systemically, and reach critical mass.

     

    But there's no going back, especially with online technology making this an almost no-brainer concept. Companies will soon stop offering their own plans and just give employees a credit to put towards a plan that YOU will pick from an exchange and pay for out of pocket. Same deal for municipal workers. Just a matter of time.

     

    Add to that the need to get muni workers onto a 401(k) type plans as well. The country can no longer afford lavish retirements for public workers. Just look at Detroit and New Jersey, list can go on and on.

     

    The ACA will be another example of, and the catalyst for, once taken-for-granted benefits going the way of the Dodo bird. Enjoy them while they last, folks.
    29 Jun, 06:37 PM Reply Like
  • Days of Broken Arrows
    , contributor
    Comments (22) | Send Message
     
    Wonder how much this will affect the refiners? Some, like PBF, have seen their stock price slide by as much as $5 this week.
    27 Jun, 05:09 PM Reply Like
  • brent_vossler
    , contributor
    Comments (81) | Send Message
     
    What does "lightly boiling" mean? Bakken boils all by itself!!!!
    27 Jun, 05:10 PM Reply Like
  • P. Dennis
    , contributor
    Comments (377) | Send Message
     
    No, it's a move toward free markets embraced by all conservatives!
    27 Jun, 05:11 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    p dennis

     

    I doubt any conservative would embrace a 2% free market they believe 100% or someone is cheating for there own benefit. Until we no longer import oil from abroad the general public will be paying the extra charges.
    27 Jun, 05:32 PM Reply Like
  • 31October
    , contributor
    Comments (751) | Send Message
     
    Use of government regulation (and its resultant coercion) to dictate winners/donors and losers/opposition is the antithesis of free market.
    27 Jun, 07:14 PM Reply Like
  • COBeeMan
    , contributor
    Comments (1378) | Send Message
     
    There is definitely a difference between a national free market and a global free market. I don't think many people in the USA would want the unintended consequences of a true global free market.
    27 Jun, 11:57 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    cobeeman

     

    If we had a true global free market many of the biggest foreign corporations would disappear. The reason being in many cases we produce a superior product that would kill their domestic market. I also believe that those in this country who are undereducated and those with non business degrees would be those who will suffer most. The only good thing that has come out of the recession is a keen awareness that our educational system needs revamping.
    28 Jun, 09:45 AM Reply Like
  • Macro Investor
    , contributor
    Comments (9050) | Send Message
     
    "The reason being in many cases we produce a superior product that would kill their domestic market. "

     

    But those superior products are also rather expensive as the US labor force is WAY TOO EXPENSIVE compared to the rest fo the world. Most foreigners would simply not be able to afford an American made product.

     

    Now, American brands making products on foreign soil with foreign labor is a whole different story. But that doesn't bring jobs to Americans.
    28 Jun, 01:44 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    M I

     

    I do agree with your comment but I was speaking in general of a company vs company no matter where the item was made. I of course want jobs for Americans and I want our educational system revamped. I would like that every professor must put in 35 hours campus so some don't get 100k for 3 hours a week in the class room and 3 hours of office time.
    28 Jun, 02:20 PM Reply Like
  • John Rhodes
    , contributor
    Comments (833) | Send Message
     
    When I see news about oil, reserves, imports, exports, etc. I just start thinking about Charlie Munger...

     

    http://seekingalpha.co...
    27 Jun, 05:13 PM Reply Like
  • leopardtrader
    , contributor
    Comments (1206) | Send Message
     
    You are rational and completely right. Listening to the music of so-called economists always result in hangover after the gig. People should get it that the era of cheap oil is gone forever. Crude will cost much more going forward. Yes progress is made in efficient usage and alternatives but then we have billions added into human civilization from China, India, Asia, Eastern Europe, Mid East, South America and Africa ! This is unprecedented potential demand. If not for some additional alternatives, efficiences and ( importantly) Russia --that feed the whole Europe for ages now, one wonders what would have happened to crude prices by now !
    27 Jun, 05:28 PM Reply Like
  • Blue22
    , contributor
    Comments (229) | Send Message
     
    Leopardtrader:

     

    Until a little over a decade ago Baku was the principal supplier of much of that part of the world, producing some of the finest, cleanest oil on the planet. It was Putin and his rise to power with the help of our oil majors, who conned the Europeans into accepting the worst sulfur count crude in the world! The refineries in that confused part of the world suck and are pumping horrors into the atmosphere.
    27 Jun, 05:45 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    Blue 22

     

    Could you flesh out your comment as to
    1] how much OIL does Putin send to Europe
    2] Which European countries have these poor refineries
    3] How much of Europe's energy has a Russian source
    4] Care to be specific on which of our oil majors are involved and where.
    27 Jun, 06:18 PM Reply Like
  • Ruffdog
    , contributor
    Comments (1627) | Send Message
     
    If you have questions why don't you do your own research. If you fine that the author of the comment is wrong you can post the correct imformation.
    30 Jun, 08:55 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    ruffdog

     

    who is your comment meant for. use headings.

     

    if it for me the reason for my question to blue22 was baku is not in Russia and he mentioned Putin. If his comment had some facts rather than a rambling, I would try to find the correct information.

     

    It's like your comment it is so poor written I had to ask who it was meant for.
    30 Jun, 10:11 AM Reply Like
  • Blue22
    , contributor
    Comments (229) | Send Message
     
    NYCTEXASBANKER

     

    Sorry I missed your points:

     

    1. I refer you to Russian oil company statistics for those numbers.
    2. Any oil and gas concern in Europe or elsewhere who would buy crude or gas with such sulfur counts should be forced to pay the damages caused!
    3. See #1. But as of this writing Russia supplied most of Europe with lo grade natural gas through Ukrainian pipelines. what's your point?
    4. I refer you to the data on US and European sanctions on Russian oil and gas production and export and the related order to all foreign companies doing business with Russia to cease projects in Russia under sanction.

     

    Pretty much all the US majors have now had to shut down operations in Russia resulting in the decapitation of their major oil and gas concerns. Plans to drill the Arctic will have to be put on hold as the Russians cannot do it alone.

     

    I see you have 2368+- comments on SA. I don't want to argue with you. But if you cannot see what Putin and gang is it is time to do some reading. Russia has announced plans to claim all of the Arctic and drill as much as they can and ship the oil and gas to China and around the World. Did you think their takeover of the Crimea was a game? At this time they have the two remaining Ukrainian forces surrounded in their small bases and have stolen all the Ukrainian wells and most of their ability to export on the Black Sea. This makes no sense as the Russians were already freely allowed to have Sevastapol, their largest naval base and several military bases there anyway. THAT IS AN ACT OF WAR UNDER INTERNATIONAL LAW. Poland has responded by linking up to Ukrainian pipelines and will help supply them throughout the coming winter. Virtually every one of Ukraine's neighbors and the countries on the Black Sea all stand against the insanity of Putin and so should you!

     

    Today, the White house was hacked by idiots traced back to Russia. I would venture to say that plans are underway to disable their networks if they attack our systems.
    30 Oct, 02:48 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    BLUE 22

     

    I appreciate your response however
    you commented
    Any oil and gas concern in Europe or elsewhere who would buy crude or gas with such sulfur counts should be forced to pay the damages caused!
    Oil has sulfur the more in content the cheaper the price.
    The US has a couple of refineries that process the highest sulfur content.

     

    What damages do you perceive the sulfur causes?

     

    I refer you to Russian oil company statistics for those numbers
    Which Russian oil co?

     

    The refineries in that confused part of the world suck and are pumping horrors into the atmosphere
    specify there names and locations.

     

    I'm not saying your wrong but without details it sounds like your repeating what you were told without knowing any specifics.

     

    I took Russian History in 1964 and followed their industrial base for investment purpose. I do not like Putin however he is loved by the people.
    This administration does not understand that parts of the world they assume people act the same which is not how it works.
    30 Oct, 09:41 AM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    All these export issues were fake alarm.

     

    Nothing actually changed.

     

    Profit levels of the all players remained the same.
    27 Jun, 05:53 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    mapodga

     

    how can you make the statement?
    Profit levels of all the players remain the same

     

    Since the available amount of oil to a refinery is decreased and therefore WTI in general will rise toward the Brent price. Seems like you forgot eco 101.
    27 Jun, 06:06 PM Reply Like
  • NV_GARY
    , contributor
    Comments (2492) | Send Message
     
    mapodga
    Guess why the refiners are being hit....
    27 Jun, 08:13 PM Reply Like
  • aretailguy
    , contributor
    Comments (1196) | Send Message
     
    mapodga, actually the producers win and the refiners lose under this rule. Oh, and the pipes and the Canadians also win.
    28 Jun, 12:56 AM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Guys, I don't see any physical change yet. Two importers could potentially export "NOT" oil, but distillates.

     

    What does that mean?

     

    They can begin build new pipelines :)
    To have possibility to export.

     

    Till then, everything is potentially. And if somebody mention, that if the rest could be exported and price of gasoline in US will go up, then politicians won't move anywhere.
    28 Jun, 12:06 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Please read this simple text from time

     

    http://ti.me/1mJIdcB

     

    It shows that US is and it will be the biggest world importer of oil and other liquids. ALREADY. So refinires already producing a lot of imported oil.

     

    If US begin export, exatly the sam will be needed to additionally import. The world price will in any case remain the same.

     

    That is good for US producer, because they need world prices and bad for US consumer because they don't like world prices.
    29 Jun, 08:57 AM Reply Like
  • Hank890
    , contributor
    Comments (1159) | Send Message
     
    Some politicians want the price of gasoline to rise, and also favor MUCH higher taxes at the pump. Why? Because selling US oil on international markets has both economic (balance of trade) and political value to the US, while higher gas prices will force citizens to use their cars less, buy smaller cars, buy hybrid cars...support mass transit, support taxpayer subsidies to solar firms that contribute to the "correct" campaigns,..all the things that the Eurocentric eco-extremists demand.

     

    Plus, the higher gas prices will further help squeeze the middle class more rendering the continued scapegoating of corporations or 1%,...just in time for the election in November. Exporting significant quantities of oil will raise gas prices at the pump,....and this will help the lying demagogues .

     

    The key here is HOW MUCH will be exported? HOW MUCH ?

     

    Isn't this inflationary? yes, it is. Inflation is what will reduce the massive public debt piled up in the recent past, and also, de facto, redistribute wealth from retirees who have worked and saved all their lives, to the unproductive, who have been taught to expect hand-outs and forgiven debts.
    27 Jun, 07:03 PM Reply Like
  • NV_GARY
    , contributor
    Comments (2492) | Send Message
     
    Hank-
    If WTI rises and Brent comes down- say they meet in the middle- aren't refiners going to be in bad shape--or is that just the price of selling abroad?
    27 Jun, 08:18 PM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    NV Gary: Yep...lower avg. crude prices will result in lower gasoline prices...and so refinery margins will generally decline (unless crude prices fall faster than do gasoline prices). That is why the stock price of US refiners fell with the announcement...the assumption was that their margins would decline.
    27 Jun, 10:23 PM Reply Like
  • aretailguy
    , contributor
    Comments (1196) | Send Message
     
    Hank, please tell it like it is. "some politicians" read, progressives, want gas price to rise. "Middle class"!!, we don't want no stinking middle class, we want trickle up poverty. "Isn't this inflationary"? Yes it is. How else can we pay for all that wonderful debt we have piled up? "Redistribute wealth from retires", how else are we to buy votes? Heck, we are importing future voters by the hundreds of thousands that will take away your future benefits.

     

    Very simply, this ruling allowing exporting of partially refined crude will benefit the American economy, the American welfare system and the American oil producer. The American consumers just do not have a voice at the table. Elections do have consequences.
    28 Jun, 01:17 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Before some of these statements are made (emotional maybe or lacking an understanding of how energy markets work), it would be good to understand what is/will actually happen...

     

    The current givens are: US crude oil cannot be exported; US products (e.g., gasoline and diesel) can be exported. US refineries are configured to run mostly heavy crudes; most fracked crude is light crude.

     

    The result of this are: Gasoline prices in the US are set by world markets/prices (with a factor for transportation) and are higher than would be indicated by light crude prices in the US. The price of light crude-world wide is higher than in the US (cannot export it and many refineries cannot process it efficiently - thus an excess and lower prices in the US).

     

    Should light crude be allowed to be exported, the following should occur...light crude prices world-wide will be lower (increased supply from the US) and US producers will receive more for it than now (depending on transportation costs). Since light crude prices world-wide will be lower (relative to what they would be without US exports), gasoline prices world-wide will be lower. This should actually result in lower gasoline prices in the US (because US gasoline prices are basis world-wide prices).

     

    So, the overall result should be opposite what many people suggest/fear.
    27 Jun, 07:20 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    RETIRED358

     

    If the light oils can be exported around the refiner then gas prices should go up in the US because the gasoline ratio goes down the heaver the oil used in the refining process.
    27 Jun, 08:45 PM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    TxBanker: As I attempted to explain, gasoline price is a world market price. If the supply of crude increases in world markets (via US exports), then the average price of world crude will decrease as will world wide gasoline prices (and thus US gasoline prices). Part of the reason it works this way is that there is more light crude available in the US than can be processed by US refineries (due to the constraint on US crude exports and the fact that US production of light crude continues to increase beyond the capacity of US refineries...which can produce all the gasoline required in the US...in fact, they make much more than can be used in the US and export the excess). US refineries are generally configured to process heavy crude (lower cost that light crude).

     

    Hope that clarifies...if not, let's continue the discussion...
    27 Jun, 10:06 PM Reply Like
  • charliezap
    , contributor
    Comments (1397) | Send Message
     
    Retired, yours is one of the very few knowledgeable comments on this article. Virtually all of the others, including the Charlie Munger link, are either emotional, ignorant, politically partisan, or shoot first and think later.
    27 Jun, 10:09 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    retired 358

     

    I must respectfully disagree that gasoline is a world price. Could you explain the mechanics for that assumption.
    27 Jun, 11:17 PM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Txbanker: You wrote: "I must respectfully disagree that gasoline is a world price. Could you explain the mechanics for that assumption."

     

    I will attempt to explain...

     

    What I mean is that the US and most other countries can export and/or import gasoline with few(er) restrictions (unlike US crude oil). This means that gasoline will be imported and/or exported by refineries/energy companies around the world to achieve the best return (price) (after including transportation costs). The US actually imports some gasoline...but exports much more than it imports. When refiners/energy companies around the world can (more or less) import and/or export gasoline to achieve the best price (return) and users of gasoline can import/acquire gasoline for the lowest price available most anywhere in the world, then the price of gasoline tends to reach a price (I use world price) basis supply/demand requirements (and including the cost of transportation) around the world - quite unlike US crude oil prices (as can be seen by comparing crude prices in different parts of the world).

     

    Having said that, there are some countries which do impose price/export controls on gasoline (usually refined in that country and usually for political reasons). But those volumes are low compared to gasoline volumes not subjected to price/export controls and thus gasoline prices are determined primarily by supply/demand rather than by import/export controls.

     

    These are not assumptions but rather facts.

     

    Not trying to be smart here but curious if you are really a banker and whether you have taken economics courses which covered supply/demand/price...

     

    Would be happy to continue the discussion if further clarification desired...or to discuss why you disagree...
    28 Jun, 10:55 AM Reply Like
  • huskers123
    , contributor
    Comments (36) | Send Message
     
    Good response retired358. Too much mush in the euphoria. Refiners really don' even want to refine the light crude, they don't make a lot on it anyway. They would love to shift this to the oil producers, and process sour crude. Especially, VLO, MPC and PSX. Keystone will be huge to refiners. The bottom line is we still import 7-8M BPD, to export would mean we would import more to net/net zero. I think the refiners will come out even better when the smoke clears.
    28 Jun, 11:17 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    retire358
    I was drafted out of college while I was a Finance major. Yes I took economics. Yes at times we did and do import gasoline. When the great politician's in NY decided MBTE should be banned they never looked at the surrounding states. There is a refinery in NJ about 8 miles as the crow flies to staten island a part of NYC. The refinery refused to make gas without mtbe and goldman sachs imported gas from roterdam and the New Yorkers got screwed. If we are speaking in general terms many of our refineries purchase the various grades of WTI at a $7-15 difference to the grades of Brent. We also bought the sludge from Venezuela at 1/5 the price of Brent. Therefore our cost structure could never be matched with foreign gasoline. Because we do not have the supplies of gas that the country needs we have to blend up in price. The other problem with your idea is infrastructure, I don't know if they fixed the problem but at one time be cause they are on separate grids if the power went out in east St Louis, IL
    the power people in St Louis, Mo a mile away couldn't help but they could send the power to help Kansas City, KS across the border from KCMO, three hundred miles away.

     

    In my other post I mentioned that the supply available of oil to some refiners was less as a result of this bypass and so the price should go up.
    using supply/demand/price.

     

    One of the problems is that most people think their are three main oil prices, WTI, Brent and Saudi/mideast crude, when each has dozens of grades.
    28 Jun, 01:26 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Retired, you have wrong data:

     

    1. In any way US remain biggest importer of oil. i don't see how this would change and it is newer planned. US currently use over 18mio barrels per day and produce around 14. So it import over 4mio per day.

     

    2. It is true that in recent year there is modest grow of us production and it is planned that till 2019 US production will be 14.9mio per day.

     

    3. If you look to the chart of the data of AEA then you can clearly see that for US refineries imported oil is not more expensive, but cheaper.

     

    http://1.usa.gov/1lpAAmG

     

    So I don't see any lose for US refineries if they will have to work with more imported oil and less US oil.

     

    4. As I see news was meant to push the prices of oil producers up, but instead of that actually pushed refiners down. Anyway both was out of the proportions.
    29 Jun, 11:59 AM Reply Like
  • Jonathan Christopher
    , contributor
    Comments (285) | Send Message
     
    I guess that I REALLY do not undertand how markets work. My understanding is that , before this "lifting" of the ban on condensate,the USA was already exporting between half and a million barrels of oil products per day. These products are exported from refineries that have limited processing capacity, and they make their profit on the "crack spread" between the cost of their crude and the value of the refined products. If they do this "gently heating" someone is suggestion, they will not be producing other products, and they need to have really hefty margins on the NGL in order to make up for that loss in other products. Oh - and yes, there will be less of the other products, so the regular crack spreads will widen. If you are a company like NTI and ALDR -close to the source of supply, and with cheap feedstocks, this would WIDEN their margins. Silly people, selling NTI and ALDW when they should be buying. What did Warren Buffet say - BUY when others are afraid???
    27 Jun, 08:46 PM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Jonathan: Light crude has a much larger percent of gasoline (naturally and without refinery upgrading) than does heavy crude. Topping refineries (no longer many of those around but relatively easy to build) just "top" the light crude to make primarily gasoline and some diesel.

     

    Since most US refineries are complex (include many upgrading processes to convert heavy crude to gasoline/diesel), they make more by processing heavy crudes. They would lose money if they process a lot of light crude.

     

    The reason that pure refining stocks (stocks of refining companies) fell with the announcement of light crude exports (or topped crude) is that it will (if a lot is exported) result in lower gasoline prices world-wide and thus lower margins for US refineries.

     

    If not clear, please continue the discussion...
    27 Jun, 10:17 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Retired you greatly overestimate the potential of US export in relation to total world market.

     

    And you greatly underestimate the flexibility of OPEC in regards to control market prices.

     

    They can easily absorbed return of export of the states like Iraq, so to absorb the few millions tons from US shouldn't be problem.

     

    About what quantities of barrels per day, we are talking that could come from US?
    28 Jun, 12:23 PM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    mapodga: I did not look up the exact numbers but in the past few years the US production has increased from about 5mbpd to about 8mbpd. That increase alone is more than the third largest country by reserves is/was producing. And production in the US could go to 10-12mbpd (unless restrictions on fracking).

     

    And, do not forget Canada...they are rapidly increasing production as well.

     

    All OPEC countries except for the Saudis are producing at max achievable rates (they need the money). Only the Saudis have been willing to attempt to control prices via controls on supply.

     

    The addition or reduction of just 1mbpd (on the basis of something like 82mbpd world wide) may seem insignificant but it is not. So, I don't think that I under or overestimated anything...but others may disagree and that is ok...it allows for discussion.
    28 Jun, 07:09 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Retired here you can see very exact numbers about import/export of US oil liquids

     

    http://1.usa.gov/HQSegF

     

    As you can see it is quite complex, but US remain NO1 world importer for all time in front, so additional US export of one type of oil it means only that will be imported more of the other.

     

    In world level export can't change anything, but it can help some US producer to optimize its market position/price. On the other side additional US consumptions would rise prices.

     

    You also have to understand that current price of imported oil is LOWER than domestic production.

     

    This is way mention that the consequences that you explained are out of the real reach. It wasn't anything personal :)
    29 Jun, 12:17 PM Reply Like
  • koolsool
    , contributor
    Comments (324) | Send Message
     
    So if it is not economical for refineries to process light crude oil. Who else has the distillation towers & equipment to process light crude so it can be exported.?????
    28 Jun, 08:12 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    koolsool

     

    Your thinking a refinery can just process any oil at any time. It can't . a refinery is not just one snake that you put oil in one end and get gas at the other. All those towers and equipment must be calibrated to grades of oil that it expects to process. If the oil is light enough at the well head they can use a simple separation processors that could by pass the refineries
    and export the oil.
    28 Jun, 09:59 AM Reply Like
  • Taibucko
    , contributor
    Comments (95) | Send Message
     
    Oil is the last mover in every economic cycle since 1973
    28 Jun, 08:53 AM Reply Like
  • Anasazi101
    , contributor
    Comments (795) | Send Message
     
    Some very good comments on this, controversial subject...
    I believe some companies are positioning themselves to take advantage of the "clarification" of the export regulations...Don't think any of the actual law on exporting bans have changed?...From what I have read or been able to understand...Much is based on supplies and demand.
    We have an oversupply of some of this product, and not enough storage space to hold it on shore...Bingo ! We are allowed to export it.
    Yes it does help in the balance of trade, with other Countries.
    How this actually effects the Major refineries, is what is confusing to myself.??

     

    As far as a Macro effect on the price of fuels or gasoline going forward, and gas/petrol being tied to or controlled by World prices? I have trouble wrapping my head around that...??
    Yes, we have a demand situation in Europe, because of Russian disruption.
    Yes, we have pending Chaos in the Middle East of production or output, because of a handful of Countries and a "band of thugs"...deemed terrorist'.
    Along with "sanctions" on top of everything else.
    Then we have demand in China because of expansion...
    And never count the U.S. out, because we just keep using no matter the price.
    But most all that ties or equates to the price of oil...Worldwide, all oil.

     

    Now back to within our own shores; We certainly can't discount what goes on, in our own trading pits or the Commodity Exchanges..We have crooks on the Floor.
    I'm pretty sure it abounds on a weekly basis, if others don't notice? So be it..

     

    Then we have a "manipulation factor" by Retailers Associations and or Dealers within States or Regions...Some should try and explain without "stuttering" why the cost per gallon can jump about 10% in a week to a 10 day period, readjust back a few nickels, and everybody thinks it's a good deal...
    Or the pump price, being "pumped up" going into a Holiday week or weekend.
    (Pun intended).
    Then after all that, a State Legislature thinking now is the time to squeeze another .10-.15 cents a gallon of taxes out over a 2-3 year period; Calling it a "temporary tax" for road repair...Temporary my azz..
    And then Washington considering a similar issue, to fatten the coffers..

     

    Like I said, I really have trouble connecting this to a price of fuel in China..?
    Or a Liter of Petrol in India..
    28 Jun, 10:18 AM Reply Like
  • Anasazi101
    , contributor
    Comments (795) | Send Message
     
    retired....
    I have heard or am aware, of sitting up these "topping refineries" in the works by different Energy companies or even Pipeliners...?
    Some articles even on Seeking Alpha.

     

    My concern would be an over usage of these, to get product out of the Country?
    Thus, eventually having a supply factor issue...That could come back to haunt us.
    Although if invested in these companies, mixed emotions come into play..
    long NTI. and pipelines.
    28 Jun, 10:31 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Anasazi101: Yes, to get around export controls of US crude oil, it is possible (probable?) that "toppers" will be built to take advantage (of lower light crude oil prices and higher product prices due to the export restrictions). As with most other things, there is a possibility of overbuilding...that is the nature of things in a free market (even though it seems as if markets are becoming less free).

     

    The building of toppers should/will result in higher crude production in the US (assuming fracking is not restricted) as prices for this light crude should rise.
    28 Jun, 11:23 AM Reply Like
  • gespecht
    , contributor
    Comments (66) | Send Message
     
    Let me see. If I own a refinery in Houston and there are no restrictions on export of my product, am I going to sell it to the American public for $3.00/gallon or get as much of it on a ship headed for Europe as I can for $6.00/gallon? That is what is going on right now. Just how is this going to bring down the price of our domestic products at the pump? You can study all the Econ you want, but the simple explanation is these people want to make more money just like all of us. Lifting the ban on oil export will certainly benefit a select few. They will be coming up with wonderful excuses to make us think it will help us all. Wipe your eyes and you will see the salesman headed your way.
    28 Jun, 11:48 AM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Gespecht

     

    At least somebody that understand the whole picture:

     

    1. Potential of oil distillates export from US is far far to small to influence seriously any world price level.

     

    2. Because the price of light oil is lower around of the world then is it in US this exporters will earn probably more.

     

    3. Since the US prices of gasoline are lower then competitive market alternatives around the world and prices are not regulated the refiners will retain fee that have and just ask for higher prices (in cases when control the financial structure)

     

    4. Because cheaper oil won't be available, the price of final product will grow up. It can go to the level if world prices and American consumer can't do anything against that. Except phone to the congressman to do something.... Politically...

     

    So summarized, producers will earn more and US citizen will pay more, the rest will be the same. We could say that this was real conservative agenda, from current US "Socialistic" government :)
    28 Jun, 12:48 PM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    mapodga:

     

    Ok, believe what you will. I assume that you are not in the energy industry so it may be hard for you to understand how supply/demand/prices work.

     

    We will just disagree...
    28 Jun, 07:22 PM Reply Like
  • gespecht
    , contributor
    Comments (66) | Send Message
     
    Retired
    Enjoy your comments. Europe has been paying two or three times as much as the US for fuel for at least 30 years. 22 years ago I ran into a fellow pilot from Germany that was flying his Comanche 260 around the world. He was paying $6+/gallon for avgas back then. We were paying about $1.60/gallon then. I do not agree with you that this is a world market that you can bring down with our supply. The end user has been under the thumb of the European distributors for decades. The oil industry is run like a monopoly and/or mafia in Europe. That's what happens with overpopulation and a captive audience that can't get away. The crooks take over. Every other country I have ever visited in the last 30 years pays a higher price for a gallon of fuel than the US. To think we could flood the world market and lower our fuel prices is quite optimistic at best. The pipeline from Cushing to Houston was reversed and two more pipelines, one reversed and one added to get midwest oil to Houston. This was done to support the price of WTI not to reduce domestic price. The support of WTI prices comes from getting it to Houston, refining it and exporting what they can for twice what they can get here. The Keystone project is yet another example of trying to support the price of Canadian oil. It has nothing to do with trying to make lower prices for anyone. Quite the opposite.

     

    I do have a little experience in the refining and energy industry in a former life here in the midwest. Now I'm just an investor.
    28 Jun, 08:24 PM Reply Like
  • charliezap
    , contributor
    Comments (1397) | Send Message
     
    gespect, from your comments, you seem pretty uninformed.

     

    1. The reason for higher gasoline prices in Europe has nothing to do with monopolies. The same major companies operate there as in the USA -- Shell, Exxon, Chevron, BP. The reason for higher gasoline prices in Europe is that excise taxes at the pump are much higher. Without the taxes, gas prices are about the same.
    http://1.usa.gov/1lp9lsk
    http://1.usa.gov/1lp9iNg

     

    2. The Keystone XL pipeline will bring another source of supply to the Gulf Coast refineries. This Canadian oil will compete with imported heavy oil from Venezuela, with declining production from Mexico, and with Saudi heavy oil, and with Nigerian oil, all of which are currently used as feedstock for these complex refineries. In Econ 101, I learned that supply competition lowers prices. As a resident of the Northeast US, I expect lower prices, if and when XL is built, as Gulf refineries ship their products to the New York area via the Colonial Pipeline.

     

    Opposition to the XL pipeline is economically irrational and is driven by environmentalists who simply oppose any new fossil fuel project, even though it is totally unrealistic to expect so-called "renewable" fuels to replace fossil fuels as time soon. There are already over 2,000 pipelines that criss-cross the USA. Normally, federal approval is not required for these pipelines, but XL does, since it crosses an international border. This has, unfortunately, brought the issue into the political arena. The State Department has already declared that the XL pipeline will have minimal envionmental impact. The Obama administration should approve it ASAP!

     

    PS: Pipelines are an infinitely safer form of oil transportation than trains. If the pipeline is not built, we will just see more and more trainloads, which do not require federal approval.
    29 Jun, 08:01 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    gespecht:

     

    Will address a couple of your comments:

     

    Prices of hydrocarbon products (gasoline. avgas) higher around world than in US due to mafia and/or distributors...No, the wholesale price of these products are about the same around the world (in countries without price control and accounting for transportation costs - if not, there would be shortages in the US because gasoline would be exported disproportionally to those areas where the wholesale prices are higher ). The difference in prices to the consumer is primarily related to governmental taxes. Energy companies often make less in Europe than in the US on a gallon of gasoline produced (I should know this as I was involved in that part of the business for several years - but, don't believe me...ask knowledgeable people - or read company financials).

     

    We will disagree that an increase in supply of crude into the world market will reduce crude prices and thus the wholesale cost of gasoline. Again, please ask a person with knowledge in this area if you do not believe that.

     

    The reversing of pipelines and the attempt to build additional pipelines is not an attempt to support the price of WTI. The reality is that there was increased production in certain parts of Canada and the US and there was no way to get all of the increase to market. So, storage facilities filled and there was no additional room to store the production. As a result the price of WTI fell (simple law of supply -up - and demand - down). The use of trains and the reversal of pipelines is beginning to allow more of this production to reach markets and thus the differential between WTI and Brent is declining. Again, don't believe me...ask an expert...or do additional research.
    29 Jun, 10:08 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    charliezap:

     

    You are absolutely correct. Sorry that I repeated much of what you said as I responded before I read your comments.

     

    Some do believe they are correct - and will not accept factual information or listen to knowledgeable people because that would cause the need to change their views.
    29 Jun, 10:14 AM Reply Like
  • Anasazi101
    , contributor
    Comments (795) | Send Message
     
    Charlie...Pretty much agree with most of your comment.
    Not going to get into the "comparables" between US and European prices.
    You can settle that with gespect and others..

     

    Your explanation of the K-XL is pretty spot on, and most have very biased opinions that are incorrect...IMO
    The Keystone Extension, is in the Nebraska Supreme Court now, to be settled probably later in Oct. or Nov.?
    Court injunction against Governor that had okayed the process, supposedly over stepped his bounds and could be in violation of the State's Constitution...Lawsuit was brought by landowners, environmentalist and other interested parties...After that is decided, probably the Administration will move on it.
    29 Jun, 04:52 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Retired,

     

    This was really professionally answer to my explanation. With hard facts :)

     

    Anyway as I see 244 already explained that I tried, but didn't succeeded. Nothing to have to add to his explanation. I just calculate new spread crack and it show progress for US refineries ...
    30 Jun, 06:17 PM Reply Like
  • mountaintop
    , contributor
    Comments (47) | Send Message
     
    This and keystone pipeline will increase USA gas prices. Will be very negative for construction of chemical plants. Less american jobs. USA unable to process light crude? What are they going to do with the hundreds of thousands of barrels of daily crude from Bakken though the planned pipeline to WI and MN refineries pour it on the ground and burn it.
    29 Jun, 12:34 AM Reply Like
  • charliezap
    , contributor
    Comments (1397) | Send Message
     
    See my comment above. XL and Bakken will create jobs. Have you looked at job growth in North Dakota, and the low unemployment rate there?
    29 Jun, 08:08 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    mountaintop: Where do we start?

     

    Yes, chemical companies want low feedstock prices and getting stranded crude to market will increase the price of this stranded crude - but unless the chemical company could use the crude where it was stranded, it was of no value to them. If they were (for example) located on the gulf coast, it was of no value to them since the gulf coast experiences crude prices closer to world prices. What chemical companies really fear is the export of US crude (not getting stranded crude to market) as this will then to increase US crude (prices and reduce world crude prices).

     

    As for your other (non factual) comments, please reread prior postings.
    29 Jun, 10:24 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    retired358

     

    I did get a response to my post of 6/28 at 1:26pm
    I assume you overlooked it
    29 Jun, 11:04 AM Reply Like
  • vikramnjnjjdjnd
    , contributor
    Comments (667) | Send Message
     
    I'm long XOM.....
    29 Jun, 12:42 AM Reply Like
  • Fanebrb
    , contributor
    Comments (570) | Send Message
     
    Why do we need oil anyway? We can burn more coal and run everything electricly. We can also build nuc plants and use all the stored fuel that is hanging around. CLF isa bargan rite now down to 14 from 104.
    29 Jun, 02:06 AM Reply Like
  • charliezap
    , contributor
    Comments (1397) | Send Message
     
    """Why do we need oil anyway?"""

     

    Your comment is not worthy of comment.
    29 Jun, 08:10 AM Reply Like
  • philli66
    , contributor
    Comments (31) | Send Message
     
    It's all a plot devised and implemented by the Masked Martin. He steals from the poor and gives to the rich.
    29 Jun, 08:30 AM Reply Like
  • koolsool
    , contributor
    Comments (324) | Send Message
     
    Who builds Topping Refinery Equipment ???? I want to invest, but do not know how.
    29 Jun, 09:30 AM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    koolsool
    look at CBI and JEC as the companies that design and build oil related projects.
    29 Jun, 11:00 AM Reply Like
  • Taibucko
    , contributor
    Comments (95) | Send Message
     
    We need a lot of light sweet crude to run our economy. If we don't have enough of it, prices will rise. The economy will suffer no matter how much analysis we do about who does what and who is permitted to do it.
    29 Jun, 12:23 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    TAIBUCKO

     

    It's not that we need light sweet crude. We need stable supplies of any grade because the refineries can be calibrated to process anything. For years we have a refinery that used a grade of Venezuelan crude that has the consistency of chunky peanut butter.
    29 Jun, 12:48 PM Reply Like
  • koolsool
    , contributor
    Comments (324) | Send Message
     
    OK, I found a company that makes Distillation Towers or Distillation Units, also known as topping refinery equipment. They make any size & use modular technology. The stock is CBI Chicago Bridge & Iron.
    29 Jun, 02:51 PM Reply Like
  • Anasazi101
    , contributor
    Comments (795) | Send Message
     
    Koolsool....Thanks for that tip...
    I have looked at that stock or company once before...
    29 Jun, 05:03 PM Reply Like
  • Jonathan Christopher
    , contributor
    Comments (285) | Send Message
     
    OK. So this is what I think I understand:

     

    1.We are producing so much of the Ultra Light Crude tht producers are not getting good money for it. That suggests they will produce less from the wells with a lot of ULC and reduce drilling in areas which have a lot of ULC. Since it comes out with the gas, if they produce the gas, they produce the ULC.
    2. By selling some of it over seas, we reduce the glut, improve the profit margins of the gas producers whose wells produce ULC, and we get more Natural Gas as a result. More natural gas will help keep prices down. More production will mean more jobs. sounds good so far.
    3. Most US refiners are "calibrated" to run a grade of crude that is much more viscous, While some of them can take a very different crude ,such as ULC, most are happiest with WTI, WTS and Brent. Shifting over to ULC means lost time, lost production, and perhaps lost business, so most will not do anything as a result of this change.
    4. On the other hand, selling any oil product overseas will tend to decrease demand for Brent, potentially lowering the WTI to Brent price difference.. Refiners far from the well head may see higher costs and lower margins as a result.
    5. Producers such as ALDR and NTI, which are close to the wells, will do well, comparatively, though the crack spread may shrink a little.
    6. what ever happens, it will not show up for months, so a reaction now is perhaps premature.

     

    Is that about right?
    29 Jun, 05:56 PM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    HOW IS THIS ANY DIFFERENT? Oil that has been Distilled/CRACKED in a distillation tower has been allowed to be exported for a long time. There are plants opening up to do so within the next few months. THIS IS NOT NEW NEWS.

     

    Yes WTI or other Sour Crudes can be exported and have been exported for some time so long as they have been converted from a feedstock into a Fuel. Distilling Crude Oil into its various components through distillation in a refinery turns crude oil into fuel which can be exported. NO NEW NEWS THERE.

     

    As more cracking plants open and more WTI is distilled/cracked for export it will likely raise the price to near parity with Brent. I have been posting this for a long time. Its not news.

     

    Refineries make money from the Brent WTI differential which moves up and down within a $ 5.00 to $ 16.00 per barrel range. What a lot of people are missing is that Refineries also make money for distilling/cracking oil and the range is roughly $ 7.50 to $ 17.50 per barrel.

     

    A lot of people also do not realize that a large part of the price per barrel is transportation costs. The cheapest way to move oil over land is by pipeline. A refiner that is close to Cushing, OK that is connected by pipeline is able to reduce that cost substantially. The same is true when the refiner sells fuels. A company that has pipelines that connect the refinery to major points/ports of sale are able to reduce their transportation costs on the sale side. This means more profit.

     

    There is a lot of profit to be made by refineries distilling/cracking oil. If exports rise and there is a market for it the price refiners make per barrel may go up along with the price of WTI. But this is not news to anyone who has been paying attention. This has nothing to do with the ruling this past week and only goes to show how uninformed Reuters is on the subject.
    29 Jun, 06:28 PM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    Here is a PDF of weekly reports on WTI/Brent Differential and Crack Spreads by region. AS YOU CAN SEE. REFINERS MAKE MORE MONEY PER BARRLE FROM THE CRACK SPREAD THAN FROM THE WTI DIFFERENTIAL.

     

    This report is done in PDF form by HOWARD AND WEIL

     

    http://bit.ly/1q6xGJH
    29 Jun, 06:56 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    244

     

    What has changed is one of the ways to get oil from ground to export.
    I hope this road analogy makes it clear. Prior to the ruling all vehicles(types or grades of oil) had to go over the toll road/bridge to get over the river. The toll road is the refiner. They then rule motorcycles (condensate) can take the foot bridge to cross the river by passing the toll road.

     

    Yes, from those who gets the export nothing changes.
    Yes, for those who drive car, buses and trucks nothing changes.
    For the toll road it loses revenue
    I hope this help
    29 Jun, 07:14 PM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    NYCTEXASBANKER only one problem with that analogy. Most US refineries do not refine condensate. Its chief use here is to be mixed with Crude oil to facilitate its flow through pipelines. Then its separated again at the refiner and piped back to the pipeline companies to be used again and again. At this point condensate is sold at a discount to WTI even though its of more value than WTI overseas. Its a simple supply and demand issue. US Pipeline companies have all they need here and refiners here don't refine it. That's why its sold at $ 20.00 less per barrel than WTI. That's why companies petitioned the government to allow it to be sold to overseas markets. If more US refiners were making money on it, it would not be sold for so much less than WTI.
    29 Jun, 07:28 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    244
    OK.
    I knew my analogy wasn't go to work as I hoped.
    Can you then explain what will replace the condensate that caused the refiners to complain. If as you said it was used to help the refiners move oil then without it who has to pay for the change?
    29 Jun, 08:16 PM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    It was the oil producers that petitioned the government not the pipeline companies because there is such a limited need for it in our market.

     

    Here is an article that you may find useful. There are others that may explain it a little better and more concisely but it was the first one in my google search and did not want to look for a perfect one.

     

    Condensate is not in high demand and production has been rising. It is not used by US refineries so they are not taking a loss when it will be sold overseas. To support our home grown oil industry it is important to find new markets for this product that is little used in the US.

     

    This should not hurt the refiners or pipeline companies but it will help the drillers. If the drillers make more money. They will employ more rigs which will in turn produce more oil and more condensate. More oil for refining and cracking is good for refiners and yes. More rigs producing more condensate and WTI may in the long run bring down the price of WTI which is good for refiners. Only time will tell but there does not appear to be any reason to panic or for their to be cause concern.

     

    To me this is a win, win situation being misunderstood. What is being misunderstood by many writers is the difference between condensate from the well head which is what this ruling is about and what its used for here verses what its used for overseas. The second issue is that condensate is being confused with distillates. The issue with crude oil being partially refined through distillation and their sale overseas has been going on for a long time. It has never been illegal to sell oil that has been processed. More plants are being built to do this and has already been accounted for by the market.

     

    http://bit.ly/1mLoLw0
    29 Jun, 08:47 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    244

     

    I appreciate both above article and the scotia report.
    In the above article it said the condensate was used as a way to make heavier oil lighter in the refining process which is against your comment
    Its chief use here is to be mixed with Crude oil to facilitate its flow through pipelines.
    I'm confused if the condensates' main use is from one end of pipeline to the other or if its used through the refining process.
    29 Jun, 09:38 PM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    NYCTEXASBANKER I was concerned that this one article may not be clear enough. Though I have read many others.

     

    This one may be of help.

     

    http://bit.ly/1ogNIPv

     

    "Once the dilbit is received at the upgrader/refinery the diluent can be removed and sent back for re-use. Some dilbit pipelines have a return flow pipeline devoted to shipping diluent back to the bitumen production source;"

     

    Keep in mind. Mixing and separating of condensate and other Diluents is done at refineries. Refineries charge for this. They don't do anything for free. That means separating and selling condensate is done at a profit to refineries.
    29 Jun, 11:04 PM Reply Like
  • NYCTEXASBANKER
    , contributor
    Comments (2447) | Send Message
     
    244

     

    I appreciate the article and believe I have a better understanding of the process.
    I can see how the refineries will feel the loss and understand why they would not liked to be bypassed.
    thanks for your time and effort.
    29 Jun, 11:15 PM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    NYCTEXASBANKER glad to have been of help. Keep in mind pure condensate which is what can be sold has to be separated from crude at a refinery and the refinery will charge for this service. They are not refining it into a fuel but they are not being bypassed. As I said, they do not do anything for free.
    29 Jun, 11:29 PM Reply Like
  • blablah
    , contributor
    Comments (46) | Send Message
     
    Alright, does all these mean that we can nibble some refiner stocks or is it too early? Is there an ETF representing the refiners whose price dipped?
    30 Jun, 12:24 AM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    Hi blablah It may or may not be too early buy. Time will tell. I purchased more shares of CVRR and ALDW and they still went down. Both are good young small cap companies that had refinery disasters last year that drastically affected earnings. Both are ranked 1# Strong Buy's by Zack's. Both have a had a few upward earnings revisions since their last dividend. Both are paying a roughly fifteen percent yield right now which does not yet account for their earnings revisions. They both look very good. But they both could continue to go down.

     

    I don't know of any ETF that tracks oil refinery stocks.
    30 Jun, 12:50 AM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    Keep in mind. If condensate goes through the roof which would be good for exploration companies. The next preferred and most used Diluent is Naphtha which is produced in the Cracking/Distilling process at refineries. So if demand goes up for condensate and thus the prices. It is likely that the demand Naphtha would go up which would likely increase the Crack Spread. Which would be good for refiners.
    30 Jun, 10:22 AM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    NEWS UPDATE!!!

     

    I have been trumpeting this for a long time. It is not and has never been illegal for refineries to sell oil products produced from US crude. To sell pure unrefined crude yes but not refined products.

     

    THIS IS THE CATALYST FOR THE INCREASE IN WTI.

     

    Keystone Pipeline's Southern Section Begins Delivering Oil To Gulf Coast
    http://n.pr/1qLfDZ1

     

    U.S. Crude Exports Have Virtually Started
    http://bit.ly/1qLfFzZ

     

    WTI AT CUSHING IS BEING SUCKED DRY AND HAS BEEN LONG BEFORE THIS RULING. TAKE A LOOK AT THE CHARTS.
    Cushing, OK Crude Oil Ending Stocks is at a current level of 21.84M, up from 21.42M last week and down from 48.60M one year ago. This is a change of 1.94% from last week and -55.07% from one year ago.
    http://bit.ly/1nU17jb

     

    If selling condensate is supposed to raise the price of WTI how come the traders in WTI have not driven up the price since the FED ruling?
    30 Jun, 06:04 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    It is entire mess.

     

    It looks WTI will be more expensive, WTS more cheap. If we look by old schema refineries that use WTI should have less profit and those that use WTS more.

     

    And then happened that some begin to use Canadian heavy crude instead of WTI and extra profit for refineries is here again...
    2 Jul, 05:36 PM Reply Like
  • mountaintop
    , contributor
    Comments (47) | Send Message
     
    Retired please be specific with what you consider non factual?
    4 Jul, 09:27 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Mountaintop: you asked "retired please be specific with what you consider non factual."

     

    Here is what you posted:

     

    "This and keystone pipeline will increase USA gas prices. Will be very negative for construction of chemical plants. Less american jobs. USA unable to process light crude? What are they going to do with the hundreds of thousands of barrels of daily crude from Bakken though the planned pipeline to WI and MN refineries pour it on the ground and burn it."

     

    I "specifically" consider everything you posted as non factual except for "will be very negative for construction of chemical plants."
    5 Jul, 10:14 AM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    mountaintop, condensate is used as a Diluent for heavier grades of crude to facilitate transport through pipelines. US refineries can refine it but the product mix makes it worth less to us because gasoline and diesel are used more in the US than in other nations who rely more on mass transit and have fewer autos per capita. Refineries here get a lot more of the end product they can sell at premium prices from heavier crudes. But those crudes can't get here cheaply without mixing them with an ultra light crude like condensate or Naphtha which is a product produced through cracking crude in a refinery.

     

    Selling US condensate or US cracked products on the world market may lower the price of Brent somewhat. It will also provide US exploration companies with more money and more incentive to drill more. The end result will be more oil at lower prices. There is a cycle to oil prices. Oil goes up then the number of drill rigs goes up, then production goes up and prices go down. Then the number of active drill rigs goes down and a few years later production declines and oil prices go up and the whole cycle starts over. Capitalism helps to lower prices.
    4 Jul, 01:37 PM Reply Like
  • mountaintop
    , contributor
    Comments (47) | Send Message
     
    Retired, CNBC, Bloomberg, Forbes and zero hedge to name a few belief keystone will raise American gas prices. Google "keystone pipeline will raise gas prices". Based on TransCanada’s own analysis, under current market conditions Keystone XL would add $20 to $40 to the cost of a barrel of Canadian crude. You quoted" NV Gary: Yep...lower avg. crude prices will result in lower gasoline prices" While I agree it is a world market, the current bottle neck glut where I reside results in lower regional fuel prices for many who do not live near a coast. For you to claim everything I say was not factual pretty much blows your creditability out of the water. Instead of trying to knock someone down because of different opinion perhaps you should link some facts of credible research to back up your view. I stick with CNBC, Bloomberg, Forbes, zero hedge and even Texas banker.
    13 Jul, 12:01 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    You are free to believe whomever you wish.

     

    You can believe cnbc, bloomberg, others - but tell me how much experience do they have in the energy business or in actually trading crude.

     

    I have been in the energy business since 1970 and have experience pricing and trading crude.

     

    What you may not understand is that 95% of those who report (and a higher % of the average population) do not really understand how energy prices are set/influenced.

     

    You are free to believe/join the 95+%. Yes, I understand that those who do understand have no credibility...

     

    I have attempted to explain how/why but you chose to believe otherwise - there is little else that I can do. I could recommend a course that I used to co-teach on World Energy...but it is a week long course and I doubt that you would spent the time...
    21 Jul, 04:23 PM Reply Like
  • charliezap
    , contributor
    Comments (1397) | Send Message
     
    mountain, similar to retired, I had almost 30 years of oil company experience. KXL will obviously provide an additional source of supply for Gulf Coast refineries. The added supply will lower input costs and potentially lower product prices, not only for the Gulf Coast area, but also for the East Coast, which is linked to the Gulf by the Colonial Pipeline, a major products carrier. Keystone will back out some imported crude, putting pressure on world prices.

     

    Keystone will relieve some of the glut from new Canadian and Bakken production, and this may mean that crude supplies to northern tier refineries increase in cost, resulting in higher product prices for some midwest areas. But overall, US product prices would decline.
    22 Jul, 12:21 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Charliezap: You are absolutely correct.

     

    Assuming the news outlets actually reported the opposite (and I am not questioning that they did), it is no wonder that the general public (and politicians) are not properly informed/are led to believe things that are incorrect and bad policy decisions are made.

     

    Of course, a cynic might believe that it is all part of the great plan to attempt to limit/prohibit the use of hydrocarbons.
    22 Jul, 10:23 AM Reply Like
  • 244
    , contributor
    Comments (177) | Send Message
     
    mountaintop I would like to see the article you are referencing. It makes sense that someone would argue that having the southern pipeline open to send US oil to more markets might raise the cost of US oil. How someone would think that completing the northern portion to bring more Canadian oil to market would raise prices smells funny. Sounds more like political hyperbole to me.
    13 Jul, 12:44 PM Reply Like
  • mountaintop
    , contributor
    Comments (47) | Send Message
     
    244 here you go with links. Anyone can Google for many more. Left or right publications all agree Midwest refineries costs will go up once pipes bypass WI and MN refineries. I live in MN. Like Albert E said it is all relative. Before Canada crude would lower US gas prices it would have to reach a critical level. We may never have enough crude leaving north America in sufficient quantity to lower us gas prices over the close proximity pinch of up to $20 bbl cost to local refineries.
    Anyone out there able to give me a number on how many MMbbls/day it would take to lower world oil prices to offset a $20 + spike in local crude?
    Please no one tell me that we can lower natural gas prices in north America if we could only just export more overseas.

     

    http://onforb.es/1ohudF2

     

    http://bit.ly/1uVHz1j

     

    http://huff.to/1uVHzyx
    3 Aug, 12:45 AM Reply Like
  • retired358
    , contributor
    Comments (129) | Send Message
     
    Mtop. you wrote "244 here you go with links. Anyone can Google for many more. Left or right publications all agree Midwest refineries costs will go up once pipes bypass WI and MN refineries."

     

    As someone once said, there you go again.

     

    Yes, those (relatively few) refineries who benefit from stranded crude prices in midwest refineries would experience higher crude prices - however, the majority of refineries (and by far the most throughput) would experience lower crude prices.

     

    We are talking about the US in general and not a relatively small part of it.
    3 Aug, 09:30 AM Reply Like
  • mountaintop
    , contributor
    Comments (47) | Send Message
     
    I worked in largest gas gathering field in Montana. We sold gas for $2.50 per M from the field I worked at. The gas at my home (10 miles from the field) I paid over $10. The field gas was shipped north past where I lived into Canada so they could jack up the price and coming and going and send it back. I know how that works.
    3 Aug, 01:03 AM Reply Like
  • hebercreeper
    , contributor
    Comments (46) | Send Message
     
    So...with chatter of overturning all aspects of crude export ban, anyone now care to weigh in on this informative thread? Refiners again reacting very poorly to the headlines.
    17 Sep, 10:52 PM Reply Like
  • mapodga
    , contributor
    Comments (3152) | Send Message
     
    Crack spread is very, very narrow. It will be low or no profit this Q.
    18 Sep, 04:45 AM Reply Like
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