Donate Bitcoin

Donate Paypal


PeakOil is You

PeakOil is You

US Crude Oil Exports: "Overnight Impact"

For discussions of events and conditions not necessarily related to Peak Oil.

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby yellowcanoe » Sun 30 Mar 2014, 11:58:49

ROCKMAN wrote:" At one time I looked at Forbes as a source of info on subjects I knew little about. Given what I've learned about their "insights" on the energy situation I may have been making a big mistake all these years. LOL.


I feel the same way about The Economist.
yellowcanoe
Heavy Crude
Heavy Crude
 
Posts: 486
Joined: Fri 15 Nov 2013, 13:42:27
Location: Ottawa, Canada

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Sun 30 Mar 2014, 12:30:34

Yella - Maybe we should form a club: Fools United. LOL. Actually this is why I piss away so much time on this site (besides showing off my oil/NG smarts). We have a deep pool of smarties in a lot of other areas that keep folks like us from swallowing too much Kool-Aid.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10781
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Pops » Sun 30 Mar 2014, 14:50:40

Subjectivist wrote:This just in from Forbes, aparently not everyone is fooled by the saudi america rhetoric.
http://www.forbes.com/sites/lorensteffy ... s%3Aenergy

But oil exports also have a different impact on the home front than LNG exports. While we currently have more gas than we need, we still import, on a net basis, about 7.3 million barrels a day, or just less than half of our daily consumption.

Any exports would have to be offset by additional imports, says Jeffrey Brown, an independent petroleum geologist who tracks import data. Embracing exports the way Hamm suggests would simply shift the burden of greater foreign oil dependency from Europe back to the U.S.

This is why the notion of energy independence is unrealistic.

Nice to see Mr. Brown from westexas is able to cut through some of the crap, on Forbs no less.

Salute.
If destruction be our lot, we must ourselves be its author and finisher. As a nation of freemen we must live through all time or die by suicide.
-- Abraham Lincoln
User avatar
Pops
Elite
Elite
 
Posts: 17642
Joined: Sat 03 Apr 2004, 03:00:00
Location: QuikSac for a 6-Pac

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Mon 31 Mar 2014, 09:05:08

Many who saw this headline (Canada Magellan Midstream to Build Condensate Splitter in Corpus Christi) might have passed it by thinking it was just some tech article. But it’s the tip of the iceberg in the discussion about exporting US “oil”. This is not a new idea: over 50,000 bbls of Eagle Ford production has been exported to Canada for more than a year using this trick: convert “oil” into “product” cheaply and ship it unrestricted out of the country.

From the Rig Zone article: Reuters - The U.S. Gulf Coast may need more than half a dozen facilities to turn condensate - a very light form of crude oil - into exportable products and handle a growing glut of output from the Eagle Ford field in Texas . The splitter will be capable of processing 50,000 bpd of condensate. If warranted by additional demand, Magellan could construct an additional 50,000 bpd splitter at this facility. Magellan expects the condensate splitter and related infrastructure to cost approximately $250 million and to be operational during the second half of 2016, subject to receipt of necessary permits and authorizations.

Splitters, or very basic distillation towers, give condensate a minimal level of processing. Without that processing, condensate is considered crude oil under U.S. law and therefore cannot be exported.

{So let’s see: if they build another “half dozen” facilities with the same capability that would mean 300,000 bbls on unexportable Eagle Ford oil turns into 300,000 bbls of exportable Eagle Ford product. And that would be in addition to the 100,000 bbls being exported when this plant comes on line. Works for me: anything that allows me to charge more for my oil is OK.}
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10781
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Graeme » Sat 05 Apr 2014, 17:55:19

To Export U.S. Oil or Not Boils Down to Industry Profit

When Big Oil began preparing last year to challenge the decades-old rules against exporting U.S. crude, the debate seemed fanciful. Then Russia took over Crimea and the idea of using American energy -- oil as well as natural gas -- to reshape global affairs became a Washington pet project.

Here’s how the battle lines are drawn: Oil producers want to chase higher prices overseas. Refiners want to keep cheaper domestic supplies. Politicians want to balance those interests with concerns that gasoline prices would rise. Everyone invokes the goal of energy independence.

Putting the posturing aside, it’s useful to imagine what actually happens to supply, demand and prices in an oil market without the export restrictions that date to the 1970s Arab oil embargo. That’s what JBC Energy GmbH, a Vienna-based research company, offered in a report this week.

The upshot? Producers win, refiners lose, global prices converge -- and the question of energy independence, is, well, irrelevant.

Lifting the ban would increase U.S. crude-oil production by about 700,000 barrels a day, raise exports by about 1.5 million barrels a day and push up imports by about 500,000 barrels a day by 2020, JBC estimates. So the net effect on the country’s energy balance sheet is pretty negligible. Global supply wouldn’t change much either, as other producers would adjust, according to JBC.


bloomberg
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Anti-Matter
Anti-Matter
 
Posts: 13257
Joined: Fri 04 Mar 2005, 03:00:00
Location: New Zealand

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Sat 05 Apr 2014, 18:35:05

"Lifting the ban would increase U.S. crude-oil production by about 700,000 barrels a day, raise exports by about 1.5 million barrels a day and push up imports by about 500,000 barrels a day by 2020". Those numbers make no sense to me. I can't even imagine what type of an illogical thought process would even lead to such estimates.

But let's get back to the basics: the US consumers DO NOT BUY OIL. None...nada...zip. They do not compete with the other oil buyers on the planet. The US consumers buy REFINED PRODUCTS. Refined products for which there is no export ban. Refined products the US consumers currently compete for with all the other consumers of refined products on the planet. US oil producers want to export so they can sell for a higher price...if it is actually higher. And has to be high enough to cover the transport cost to just break even.

But guess what: at least 20 million bbls of US production are being exported every year right now even with the so called "ban". But how can that be? Easily done: take a bbl of Eagle Ford Shale production, run it thru a minimal upgrader plant, pump it down one of the two pipelines reversed for just this very reason, load it on a tanker and ship it to a refinery in eastern Canada. And this is happening to at least 50,000 bbls of EFS production every day because once it comes out of the upgrader it's classified as a "product" and not oil. And how much more of these "products" will be exported in the future? A company has just announced their plans to build the largest upgrader in S Texas in the history of the US. And why are producers paying this extra cost? Because those other refineries are capable of producing more valuable product then the Gulf Coast refineries.

The entire discussion about oil exports has nothing to do with US energy independence, punishing Russia or whatever other lame ass rationale expressed. It's about simple business economics. Just like the fact that US consumers compete on the world market today for the liquid hydrocarbons they consume. And will continue to do so whether the oil export ban is lifted or not. And how much refined products do we export: The United State became a net exporter of petroleum products only three years ago, but it is already the world's largest exporter of them. U.S. exports of petroleum products — which include diesel, jet fuel and gasoline, but not crude oil — stands at about 2.9 million barrels per day, up from 2.6 million barrels in 2012 and only 1.3 million gallons in 2007. "The U.S. was the bread basket to the world. Now we're the refiner to the world."
Last edited by ROCKMAN on Sat 05 Apr 2014, 19:42:46, edited 1 time in total.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10781
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Graeme » Sat 05 Apr 2014, 19:07:34

From same article:

Prices, however, would be transformed. West Texas Intermediate, the benchmark U.S. grade, has been cheaper than Brent, its international counterpart, since 2010 as a surplus of domestic crude developed. Even as the U.S. still imports more than 7 million barrels a day, it has too much domestic crude because the refining system wasn’t designed for the type of oil produced from hydraulic fracturing in shale formations.

Right now that oil has nowhere to go, which is why domestic prices are lower. As the glut escalates, at some point the U.S. has to curtail production, expand refineries or allow exports. If it’s the latter, the gap between WTI and Brent would narrow to as little as $1 a barrel, compared with about $5.55 on April 4, according to JBC.

European refiners that would buy the cargoes would benefit, while U.S. plants would lose much of their advantage and reduce runs, JBC estimates. That means U.S. exports of refined fuels, which are permitted and are currently at record levels, would shrink. Gasoline prices wouldn’t change much because they depend on global trade, according to JBC.
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Anti-Matter
Anti-Matter
 
Posts: 13257
Joined: Fri 04 Mar 2005, 03:00:00
Location: New Zealand

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Sat 05 Apr 2014, 20:07:38

"...it has too much domestic crude because the refining system wasn’t designed for the type of oil produced from hydraulic fracturing in shale formations. Right now that oil has nowhere to go..." Obviously not true. As noted above at least 20 million bbl per year of Texas production are being exported to Canadian refineries. And due to other exceptions allowed by the US gov't: during this last January 7.8 million bbls of crude oil were exported to Canada. And soon even more crude oil will be exported from the US despite the ban for a simple reason: the ban only applies to oil PRODUCED in the US. Oil originating in another country has always been allowed to be shipped from the US. Not much of this has happened to date by that dynamic is about to change. Reuters: Enbridge has become the first company to confirm plans to re-export Canadian oil from the United States, a move that could fuel debate over U.S. trade policy and intensify opposition to new oil sands pipelines. Its U.S. subsidiary Tidal Energy Marketing has received a U.S. government license to export Canadian-origin oil from a U.S. port. They expect the first 40,000-tonne cargoes to set sail from Texas ports to Europe later in April. Re-exports from the United States are rare but allowed as an exception to the ban. Enbridge plans to export "less than 1.5 percent" of its total U.S. shipments. That would come to under 36,000 bopd of the pipeline's 2.4 million bopd system. A volume that may grow amid rising North American production.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10781
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Graeme » Sat 05 Apr 2014, 20:58:19

So JBC is right; the oil industry is after more profits by circumventing the current ban of oil exports.
Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
User avatar
Graeme
Anti-Matter
Anti-Matter
 
Posts: 13257
Joined: Fri 04 Mar 2005, 03:00:00
Location: New Zealand

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Sun 06 Apr 2014, 00:10:48

Graeme - Of course. The laws of the federal government's SEC require that US public companies makes every legal effort to maximize their profits for the benefit of their shareholders. If a US company were to knowingly sell its oil at a lower price then it could attain from another buyer they could face legal action by the gov't and lawsuits from its shareholders. You certainly wouldn't want the oil companies to break the law, would you? LOL.

And none of the companies are circumventing the oil export ban. They are following federal regulations exactly as they are written. In fact, companies have been authorized by the gov't to export oil for many years: "The U.S. government has approved at least four licenses to export crude oil to Europe Reuters learned from a Freedom of Information Act request. The Department of Commerce authorized two licenses to export U.S. crude to the U.K. since last year, totaling $1.8 billion, and two more to Italy, totaling $3.12 billion. One license to export to Germany, totaling $2.6 billion, was filed in January. These are the first licenses to allow crude exporting to the U.K. since at least 2000 and the first to any European country since 2008, according to the BIS, which has approved 120 licenses since January of last year."

Did you catch that: the US gov't has approved the export of our oil on 120 occasions in just the last 14 months. I'm surprised you didn't know that. OTOH perhaps it's understandable given the gov't wasn't very forth coming with the info as indicated by the fact that Reuters had to force it out of the gov't using the Freedom of Information Act. You know it's almost as if the gov't didn't want citizens to know they were helping oil companies to maximize their profits. Go figure, eh. LOL. BTW: you wanna guess how much of that oil came from gov't leases and thus earning them more royalty income. And don't forget the gov't gets a little taste of those higher profits via the tax code. And you do know that about 600 million bbls of oil are produced yearly from federal land making them the single largest oil royalty owner in the US. It's almost as if the gov't "is after more profits by circumventing the current ban of oil exports." And did you realize that if you ranked the amount of oil coming from the leases belonging to the US gov't there is only one company producing more oil per year: ExxonMobil at around 850 million bbls of oil per year. And that's worldwide and not just in the US. I think a lot of folks still don't get that the US gov't is a major player in the fossil fuel business. Anything that improves profits from fossil fuel production benefits the US gov't directly. Like the surge in coal demand has significant increased the revenue to the gov't thanks to a big increase in the export of coal mined from gov't lands. The US gov't isn't just an advocate for the fossil fuel industry. It's part of it...a very big part.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10781
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

The Biggest Oil Story Of 2017

Unread postby AdamB » Mon 01 Jan 2018, 22:30:50


There have been plenty of eye-catching stories in the energy industry this year, but one notable development has been the rise of the U.S. as a crude oil exporter. The ban on crude exports from the U.S. was lifted at the end of 2015, and exports ticked up in the following year, but only modestly. 2017, however, was the year that the floodgates opened. In the first half of the year, there were several weeks when the U.S. topped 1 million barrels per day (mb/d), but exports averaged about 750,000 bpd between January and June. (Click to enlarge) In the third quarter, the export machine really kicked into high gear, and Hurricane Harvey was arguably the spark. It may seem odd at first blush that a disastrous storm that ravaged Texas would be the thing that spurred a rise in U.S. oil exports,


The Biggest Oil Story Of 2017
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 3989
Joined: Mon 28 Dec 2015, 16:10:26

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Subjectivist » Tue 02 Jan 2018, 08:49:00

This is what I was asking about a couple days ago! Now that Brent is a big enough price difference there is a profit motive to export some of that storage crude into the world market, driving USA prices up closer to world prices.
II Chronicles 7:14 if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.
User avatar
Subjectivist
Fusion
Fusion
 
Posts: 4267
Joined: Sat 28 Aug 2010, 06:38:26
Location: Northwest Ohio

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Outcast_Searcher » Tue 02 Jan 2018, 15:53:36

Subjectivist wrote:This is what I was asking about a couple days ago! Now that Brent is a big enough price difference there is a profit motive to export some of that storage crude into the world market, driving USA prices up closer to world prices.

Yup. When price differentials (among commodities, generally) get big enough, speculators will use arbitrage to try to profit on the differential being "too big". In the short run they may or may not make money, but this does tend, over time, to keep differentials from getting "crazy big".
User avatar
Outcast_Searcher
COB
COB
 
Posts: 4619
Joined: Sat 27 Jun 2009, 20:26:42

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Wed 03 Jan 2018, 13:54:44

Forget the daily export numbers: as meaningless as weekly numbers. They are too biased by sailing dates. For instance the last week of Oct saw 2.13 mm bopd. The following week saw 870,000 bopd. Monthly gives a better sense of the dynamic still not a great long term forecaster: Oct 2017...1.73 mm bopd. But a record high month. Last 4 weeks of Dec averaged 1.38 mm bopd.

And remember: the great majority of oil is sold under long term contracts with prices tied to benchmarks. But that doesn't mean a long term contract buyer can't sell some of its oil into the spot market if the numbers work for it. Sometimes you'll see a tanker make a radical course change mid ocean.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10781
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Oil World Turns Upside Down as US Sells Oil in Middle East

Unread postby AdamB » Thu 08 Feb 2018, 23:16:29

The United Arab Emirates, a model Persian Gulf petro-state where endless billions from crude exports feed a giant sovereign wealth fund, isn’t the most obvious customer for Texan oil. Yet, in a trade that illustrates how the rise of the American shale industry is upending energy markets across the globe, the U.A.E. bought oil directly from the U.S. in December, according to data from the federal government. A tanker sailed from Houston and arrived in the Persian Gulf last month. The cargo of American condensate, a type of very light crude oil, was preferred to regional grades because its superior quality made more suitable for the U.A.E’s processing plants, a person with knowledge of the matter said, asking not to be identified discussing a commercially sensitive matter. “As a member of OPEC and a large crude producer, I would imagine they would be


Oil World Turns Upside Down as US Sells Oil in Middle East
Peak oil in 2020: And here is why: https://www.youtube.com/watch?v=2b3ttqYDwF0
AdamB
Volunteer
Volunteer
 
Posts: 3989
Joined: Mon 28 Dec 2015, 16:10:26

Previous

Return to Geopolitics & Global Economics

Who is online

Users browsing this forum: No registered users and 2 guests