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.

US Crude Oil Exports: "Overnight Impact"

Unread postby westexas » Thu 27 Mar 2014, 09:12:50

I understand that Harold Hamm testified in front of Congress. An excerpt from a Reuters article (emphasis added):

Lifting U.S. crude export ban would help counter Russia- oil CEO
http://www.reuters.com/article/2014/03/ ... 2T20140326

“While opening LNG exports is a noble goal and one that we as a country are actively working towards, the fact is the infrastructure to undertake large scale overnight LNG exports does not currently exist,” Harold Hamm, the chairman and CEO of Continental Resources Inc, will tell lawmakers at a House of Representatives Foreign Affairs Committee hearing slated for 10 am/1400 GMT on Wednesday.

“If we want to have an overnight impact on today’s global events, we can immediately begin exporting crude oil, which does not have the same infrastructure constraints” as LNG, he will say, according to prepared remarks.


It’s easy to demonstrate the “overnight impact” that Mr. Hamm is talking about. Here is a link to the latest four week running average US supply data from the EIA:

http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_4.htm

If we just focus on the imported crude oil supply for US refineries over the last four weeks, we (gross) exported 64,000 bpd and had (gross) imports of 7,337,000 bpd. So net imports of crude oil were:

Gross Imports – Gross Exports = Net Imports
7,337,000 – 64,000 = 7,273,000 bpd

Let’s assume that we boost gross exports by 1,000,000 bpd, and to offset for the decline in crude oil supply to US refineries we then boost gross imports by 1,000,000 bpd. Net imports of crude oil would then be:

8,337,000 – 1,064,000 = 7,273,000 bpd
westexas
Expert
Expert
 
Posts: 248
Joined: Tue 04 Jun 2013, 05:59:53

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Paulo1 » Thu 27 Mar 2014, 09:25:31

Of course the at pump price would increase..say +$1.00? Companies would be pleased, but what say the public then?

Paulo
Paulo1
Heavy Crude
Heavy Crude
 
Posts: 425
Joined: Sun 07 Apr 2013, 14:50:35
Location: East Coast Vancouver Island

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby westexas » Thu 27 Mar 2014, 09:39:47

It's basically a fight between Mid-continent refiners and Mid-continent producers. Refiners are more than happy to pay WTI prices for crude oil, while generally charging market (Brent based) prices for refined products, and pocketing the difference as higher crack spreads.

If the US exported some grades of crude oil and condensate, while boosting imports to compensate, I think it would have a negligible impact on what US consumers pay at the pump, and noted above, if one uses some elementary school arithmetic, it's hard to see how it would have an "Overnight impact" on global events.
westexas
Expert
Expert
 
Posts: 248
Joined: Tue 04 Jun 2013, 05:59:53

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Thu 27 Mar 2014, 12:46:20

So funny. Apparently Mr. Hamm follows the philosophy: never let a good crisis go to waste. So kind of him to offer the oil the US consumer uses to our cousins on the other side of the world. A very generous offer. I have an even better idea: let Mr Hamm swap some of his oil for some of the KSA oil we import. Then there wouldn't be a need to ship both loads of oil half way around the world. Such swaps have been done for decades to save those transport costs. This way Mr. Hamm can continue to sell his oil in the US...and continue getting the same price. And as an incentive he picks up a bit more of US market share by replacing the KSA oil. That way he can sell even more oil here...at our posted prices.

I can play this freaking game with Mr. Hamm all day long. To bad his audience in congress doesn't understand even the basics of oil marketing.
Last edited by ROCKMAN on Thu 27 Mar 2014, 14:09:01, edited 2 times in total.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10780
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby AndyA » Thu 27 Mar 2014, 12:47:52

In the land of the blind, the blindest man is king.
If you want the truth to stand clear before you, never be for or against. The struggle between "for" and "against" is the mind's worst disease. -Sen-ts'an
AndyA
Heavy Crude
Heavy Crude
 
Posts: 303
Joined: Sat 10 Aug 2013, 00:26:33

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Subjectivist » Thu 27 Mar 2014, 13:29:18

ROCKMAN wrote:So funny. Apparently Mr. Hamm follows the philosophy: never let a good crisis go to waste. So kind of him to offer the oil the US consumer uses to our cousins on the other side of the world. A very generous offer. I have an even better idea: let Mr Hamm swap some of his oil for some of the KSA oil we import. Then there would be a need to ship both loads of oil half way around the world. Such swaps have been done for decades to save those transport costs. This way Mr. Hamm can continue to sell his oil in the US...and continue getting the same price. And as an incentive he picks up a bit more of US market share by replacing the KSA oil. that way he can sell even more oil here...at our posted prices.

I can play this freaking game with Mr. Hamm all day long. To bad his audience in congress doesn't understand even the basics of oil marketing.


His audience in Congress only undertand sounding good making promises to get reelected. None of them can balance a checkbook let alone balance oil trade.
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: 4264
Joined: Sat 28 Aug 2010, 06:38:26
Location: Northwest Ohio

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Quinny » Thu 27 Mar 2014, 13:34:12

I am sorry, but I just do not understand the point in what the guy is saying and peoples comments seem to confirm that. Am I just being dumb?
Live, Love, Learn, Leave Legacy.....oh and have a Laugh while you're doing it!
User avatar
Quinny
Fission
Fission
 
Posts: 3335
Joined: Thu 03 Jul 2008, 02:00:00

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby pstarr » Thu 27 Mar 2014, 13:44:39

Quinny wrote:I am sorry, but I just do not understand the point in what the guy is saying and peoples comments seem to confirm that. Am I just being dumb?
Hamn says we need to export oil (not gas) to fight the Ruskies. The comments here say he is fecking nutz.
/sarc
pstarr
NeoMaster
NeoMaster
 
Posts: 26766
Joined: Mon 27 Sep 2004, 02:00:00
Location: Behind the Redwood Curtain

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby westexas » Thu 27 Mar 2014, 13:53:20

Re: Quinny

Are you saying that you are confused by assertions that exports of oil and gas--from a net oil and gas importer--will have a material impact on global supplies of net exports of oil and gas?
westexas
Expert
Expert
 
Posts: 248
Joined: Tue 04 Jun 2013, 05:59:53

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Thu 27 Mar 2014, 14:14:55

Q - I suspect your confusion comes from trying to see the logic in the completely illogical proposition Hamm is tossing out. It would be like me, some one with no money to buy a plate of beans offering to give some of my beans so you can eat. How can I give you some beans if I don't have any. Except, of the course, I give you the beans my next door neighbor (in the case Canada or Mexico) gives me. The how do I eat if I do?
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10780
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Pops » Thu 27 Mar 2014, 14:29:04

Prices in ND dipped to near $70/bbl recently. Exporting some crude would help Harold out with settling his divorce I suspect.

Sep Sweet Crude Price = $92.96/barrel
Oct Sweet Crude Price = $85.16/barrel
Nov Sweet Crude Price = $71.42/barrel
Dec Sweet Crude Price = $73.47/barrel
Jan Sweet Crude Price = $74.20/barrel
Feb Sweet Crude Price = $86.89/barrel
Today Sweet Crude Price = $84.00/barrel

https://www.dmr.nd.gov/oilgas/directors ... -03-13.pdf
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 Quinny » Thu 27 Mar 2014, 16:05:06

Thank-you for confirming my confusion :)

What I can't understand is the firstly why the stupidity is published, but secondly no-one responds in the Reuters link with the obvious points made here!
Live, Love, Learn, Leave Legacy.....oh and have a Laugh while you're doing it!
User avatar
Quinny
Fission
Fission
 
Posts: 3335
Joined: Thu 03 Jul 2008, 02:00:00

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby GHung » Thu 27 Mar 2014, 16:12:29

Quinny - I left a comment calling them on the math; simple and to the point. That was hours ago. I guess they didn't want their fairy tale edited with reality.
Blessed are the Meek, for they shall inherit nothing but their Souls. - Anonymous Ghung Person
User avatar
GHung
Fission
Fission
 
Posts: 2169
Joined: Tue 08 Sep 2009, 15:06:11
Location: Moksha, Nearvana

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby westexas » Thu 27 Mar 2014, 20:26:57

A comment following the Reuters article:

UrDrighten wrote:
If we have such a surplus of oil that we are looking for people to sell it to, perhaps we would be wise as a nation to cut back until production meets domestic demands.

What we have now is all we’re ever going to get.


So, we should cut back our crude oil production until our domestic crude oil production is sufficient to only meet the demand for crude oil from US refineries, about 15.0 to 15.5 mbpd. Given the discussion in the media about exporting US oil and gas, it's actually a pretty reasonable comment.

And of course, last year, a talking head on CNBC noted in passing that the US was already a net crude oil exporter.

And so it goes . . .
westexas
Expert
Expert
 
Posts: 248
Joined: Tue 04 Jun 2013, 05:59:53

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby peterjames » Thu 27 Mar 2014, 22:40:41

Very similar argument that was put together by gas companies along the eastern parts of Australia. Previously gas was a large by product of the oil industry and was sold cheaply by to supply the eastern states. Then came the idea to export it for more money, and to spend 80 billion dollars building 3 gas plants to allow export. Now they realise they may have trouble supplying 3 gas plants, and the east coast of Australia. The only thing that has occurred, is that gas prices have (or will, when long term contracts expire), trebled in price and the eastern states may suffer gas shortages in coming years.
peterjames
Coal
Coal
 
Posts: 28
Joined: Sun 16 Feb 2014, 02:46:16

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby rollin » Thu 27 Mar 2014, 23:27:25

This is a case of national interest intersecting market forces (greed). The failure over the last six decades by the market to protect the interests of the US has been mildly throttled back by government edicts but mostly enhanced by other government edicts (trade agreements). Apparently the business sector is not happy until it is allowed to freely run amok without being impeded at all, even if the free market has corrosive effects upon the society supporting it . Yes, I said supporting it. All those businesses use the roads, buildings, land, water, people and resources of a nation and seem to have about as much appreciation for all that is given to them by the people they so quickly desert. The mercenary mindset of business today is an ethical and moral black spot on society.
Even worse, government has aided this mindset time and time again to the distress and harm of the people they are supposed to be protecting and serving.
Once in a while the peasants do win. Of course then they just go and find new rulers, you think they would learn.
rollin
Heavy Crude
Heavy Crude
 
Posts: 294
Joined: Thu 06 Dec 2012, 17:28:24

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Pops » Fri 28 Mar 2014, 09:17:37

Rollin I mentioned the other day that the grid might have been more reliable in the days of the regulated monopolies. It dawns on me that the Reagan deregulation - privatization - is akin to the Great Russian post-Soviet privatization - Katastroika - the handover of the country's wealth and security to the few. That's the dynamic behind the current focus on inequality, hoarding vs sharing.

In the future of falling energy this is the big question, do we as countries and individuals fall together or fall apart?

.
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 pstarr » Fri 28 Mar 2014, 12:20:21

So Pops, you are saying the US has already downsloped into a kleptocracy? We are already the same as Russia?

I suspect Putin understands us better than we understand ourselves. And visa versa. We think he is a klepto. They (the Russian people) think Obama is a klepto. But none of us (US or Russian citizens) believe our own leaders to be kleptos. :?
/sarc
pstarr
NeoMaster
NeoMaster
 
Posts: 26766
Joined: Mon 27 Sep 2004, 02:00:00
Location: Behind the Redwood Curtain

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby Subjectivist » Sun 30 Mar 2014, 06:48:26

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. Midwest producers like Hamm talk about rising oil production as if we have a surplus, but we are a long way from domestic production levels that would reduce imports to zero. Even if we achieve those levels, we are unlikely to maintain them for long.

For consumers, the entire debate doesn’t matter much. Exporting crude probably would have little effect on gasoline prices because most refiners are already selling their products based on the Brent price for crude, which is higher than the price for West Texas Intermediate, the U.S. benchmark. The Brent, or world, price is currently about $6.50 a barrel higher than WTI.


More at the link.
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: 4264
Joined: Sat 28 Aug 2010, 06:38:26
Location: Northwest Ohio

Re: US Crude Oil Exports: "Overnight Impact"

Unread postby ROCKMAN » Sun 30 Mar 2014, 11:36:09

"While we currently have more gas than we need". So even when these idiots knock down the idea of the US bailing out others with oil exports they still can even get the simple basics correct: we only produce 93% of our NG consumption. We do not "have more gas then we need". That's why we are a net importer of NG...just like oil. 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.
User avatar
ROCKMAN
Expert
Expert
 
Posts: 10780
Joined: Tue 27 May 2008, 02:00:00
Location: TEXAS

Next

Return to Geopolitics & Global Economics

Who is online

Users browsing this forum: No registered users and 9 guests