Posted: Wed May 14, 2008 4:40 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
we are able to import gasoline almost without limit
I think there is probably a limit. Unfortunately, we do not get a weekly update on the European refinery situation. Checking back in the IEA reports, as of last June, when they were at their maximum production, they were at about 14 mbpd crude oil inputs, which was only about 87% of their capacity.
So I think if push came to shove, they could probably get another 1.5 mbpd if they really wanted to.
But that is still plenty as far as being able to export to us to get us over the summer hump, so to speak, even more because in general, European fuel consumption is flat or declining.
Posted: Wed May 14, 2008 4:53 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
pup55 wrote:
Quote:
we are able to import gasoline almost without limit
I think there is probably a limit. Unfortunately, we do not get a weekly update on the European refinery situation. Checking back in the IEA reports, as of last June, when they were at their maximum production, they were at about 14 mbpd crude oil inputs, which was only about 87% of their capacity.
So I think if push came to shove, they could probably get another 1.5 mbpd if they really wanted to.
But that is still plenty as far as being able to export to us to get us over the summer hump, so to speak, even more because in general, European fuel consumption is flat or declining.
Don't disagree but given all the factors it seems that hitting 1.6 lets say is iffy today compared lets say to 2005 or 2006. Given WestTexas's export land and growth in China and India.
I've got no problem calling peak gasoline imports
As far as capacity numbers go for refineries I think that the expansion to complex refineries and additional sulfur requirements has lowered real capacity. I think the refineries are just not willing yet to admit that they need to expand a bit more to get real capacity up. I'd suggest that at least 3% of real capacity has been lost with the move to ULSD and higher sulfur heavier crudes.
This of course is just conjecture but it seems that refineries may need to adjust the max capacity downwards.
Given this I'd be surprised if refineries hit 90% capacity and if they finally do I think you will find they either expanded or reduced the capacity ratings. Needless to say I'm a bit skeptical of current capacity reports.
Posted: Wed May 14, 2008 4:58 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
GoghGoner wrote:
wup memmel, you got an extra "http//" in your link.
I think we have reached peak oil imports and will never break 11,057 of 8/2005. No idea about peak gasoline imports.
Sorry for the second post I replied to pup55 but its pretty obvious that if you adjust the capacities upwards more in line with crude inputs then it looks like capacity claims are probably not true. Just bumping it up 3-5% makes things look more realistic.
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Wed May 14, 2008 8:29 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Again today, the rhetoric reflects far too much expectation wrt consumer demand destruction. Only 6% of the CPI is comprised of home fuel oil/propane and transporation fuels. One could argue that even another 50% increase still won't HURT. More is spent by familites dining out each month...
Off topic: food is up 4% YOY in usa & 0.6% in canada _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Posted: Wed May 14, 2008 8:47 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
I'd be surprised if refineries hit 90% capacity
The refinery system has not been the same since Katrina hit. I think the highest the system got was a little over 93% last summer, and has not been sustainably over that level since '04 or perhaps earlier.
Also you have to figure the imports do not all come from Europe. It will be interesting to see the gasoline usage data from Mexico this year. Last year it increased on the order of 6.5% , and if that is the case, you have an export land effect there. That refinery in Aruba that sends us .2 mbpd is in really iffy condition, and the asian refineries that were shipping to the west coast would probably just as soon ship to China.
It will be interesting to see where we end up this year. A few more weeks of .9 mbpd and someone is going to have to walk.
Posted: Thu May 15, 2008 1:40 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
pup55 wrote:
Quote:
I'd be surprised if refineries hit 90% capacity
The refinery system has not been the same since Katrina hit. I think the highest the system got was a little over 93% last summer, and has not been sustainably over that level since '04 or perhaps earlier.
Also you have to figure the imports do not all come from Europe. It will be interesting to see the gasoline usage data from Mexico this year. Last year it increased on the order of 6.5% , and if that is the case, you have an export land effect there. That refinery in Aruba that sends us .2 mbpd is in really iffy condition, and the asian refineries that were shipping to the west coast would probably just as soon ship to China.
It will be interesting to see where we end up this year. A few more weeks of .9 mbpd and someone is going to have to walk.
We can be pretty certain that California demand will remain strong well past five dollars a gallon simply because of the infrastructure and lifestyle. So I'm pretty certain that most of the west coast demand will remain intact. However this means more oil heading towards refineries that supply the west coast and away from refineries that supply the east coast.
So maybe we see a bit of a bidding war develop between the two major population centers of the US. This is assuming that this year we don't have enough oil to supply normal demand in the wealthier nations. Looked at the data and don't see anything yet but it would be interesting if we start to see a oscillations starting to develop between PADD 5 (West Coast) and PADD 1 ( East Coast ).
Posted: Fri May 16, 2008 2:02 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Why will refined products go to China over California?
China's retail prices are quite low compare to California.
Actually, China is an exporter of refined products. I don't know if the earthquake changes anything.
Looking at the major construction firms, they still have a lot of backlog in expanding or building new oil refineries. I don't think we will have shortage of gasoline. Diesel or heating oil during a very cold and long winter will bring shortages.
Posted: Fri May 16, 2008 1:17 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
nth wrote:
Why will refined products go to China over California?
China's retail prices are quite low compare to California.
Actually, China is an exporter of refined products. I don't know if the earthquake changes anything.
Looking at the major construction firms, they still have a lot of backlog in expanding or building new oil refineries. I don't think we will have shortage of gasoline. Diesel or heating oil during a very cold and long winter will bring shortages.
Its a open market products go to the highest bidder once we get to the point that storage no longer can be used to meet the variability in price/demand a permanent shortage condition effectively starts circling the globe. Its like a wave. One basically exists now for the poorest countries but we also have one developing for the wealthier buyers.
Posted: Fri May 16, 2008 1:34 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
FreddyH wrote:
Again today, the rhetoric reflects far too much expectation wrt consumer demand destruction. Only 6% of the CPI is comprised of home fuel oil/propane and transporation fuels. One could argue that even another 50% increase still won't HURT. More is spent by familites dining out each month...
Off topic: food is up 4% YOY in usa & 0.6% in canada
The impact of oil on the consumer goes far beyond the 6% people spend on gasoline. The price of oil touches every aspect of consumption in America. We are probably looking at prices for over 90% of what we buy being affected by oil prices. Doubling the price oil is probably the equivalent of 25% inflation when the total impact is considered. Only the upper middle class and above can ignore what is currently happening with prices and that is a very small pecentage of the American population. This is why John McCain will have no chance of winning this year unless the gays drag the democratic party into a fight over gay rights, which will galvanize the Christian right into taking a political stand again.
McCains best strategy is still God, guns and gays. Obama's best strategy is the economy, the war, and distancing himself slightly from the gay community which is exactly what he is doing.
That said alot of Christians are not hopeful after how Bush has performed. I'm not talking about the one's who still think Bush is a saint. Around 10% of the traditional right is seriously concerned about the course of the nation and many feel betrayed after faith-based-gate, iraq-gate, guantanimo and Abu Ghraib.
There are even Christians talking that Bush may be the last American President. There is a whisper of God's judgment coming soon to a land near you that is gaining ground.
So much of the troubles we are seeing now are the result of oil and we do not even understand it. Most of us don't.
I am hoping America gets one more reprieve, but I may just be being selfish. I have a family. _________________ I return to you now at the turning of the tide.
Posted: Fri May 16, 2008 1:42 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
memmel wrote:
nth wrote:
Why will refined products go to China over California?
China's retail prices are quite low compare to California.
Actually, China is an exporter of refined products. I don't know if the earthquake changes anything.
Looking at the major construction firms, they still have a lot of backlog in expanding or building new oil refineries. I don't think we will have shortage of gasoline. Diesel or heating oil during a very cold and long winter will bring shortages.
Its a open market products go to the highest bidder once we get to the point that storage no longer can be used to meet the variability in price/demand a permanent shortage condition effectively starts circling the globe. Its like a wave. One basically exists now for the poorest countries but we also have one developing for the wealthier buyers.
I think that is a point of discussion that deserves a thread entirely to itself. there probably is one around here somewhere. Yeah, so when you move out of a surplus paradigm, now you end up in a just in time paradigm, if supply falls below that whee do we go then? Hoarding? Maybe the destruction of the world market place as producing countries begin stockpiling oil?
Just a month ago the King of Saudi Arabia said they had decided not to develop some knew fields. Leave them in the ground for future generations he said, they will need it.
Unless the information that we are all getting now is complete garbage this goose is cooked. The age of oil is officially over, now starts the mad scramble to deal with the aftermath. Some countries will choose war, some will choose powerdown, some will choose alternatives, some will dabble in all three. America is still very highly dependent on oil for GDP growth, and since we are also important over half of our oil, and we are the largest consumer on the planet the problems that are coming will hit us with a force that is a full order of magnitude greater than other countries. Most of Europe no longer depends on oil for it's GDP growth. Europe comes out the winner here folks, Japan also does not need new oil supply to grow it's economy. These stats can be found in the book by Tertzakian 'A thousand barrels a second.'
America needs to shift immediately from the car culture to the rail culture. When I say immediately, I mean yesterday. _________________ I return to you now at the turning of the tide.
Joined: Jan 14, 2008 Posts: 321 Location: The Yukon
Posted: Fri May 16, 2008 4:24 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Gandalf_the_White wrote:
FreddyH wrote:
Again today, the rhetoric reflects far too much expectation wrt consumer demand destruction. Only 6% of the CPI is comprised of home fuel oil/propane and transporation fuels. One could argue that even another 50% increase still won't HURT. More is spent by familites dining out each month...
Off topic: food is up 4% YOY in usa & 0.6% in canada
Doubling the price oil is probably the equivalent of 25% inflation when the total impact is considered.
This is complete nonsense. Economical models can easily correlate and predict crude price rises with the eventual effect on the CPI two years down the road...
And the proof is in the pudding: Crude has quadrupled since Iraq2, but in that 5 year span, the CPI has only drifted to 4%. _________________ www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits)
Posted: Fri May 16, 2008 4:33 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
FreddyH wrote:
Gandalf_the_White wrote:
FreddyH wrote:
Again today, the rhetoric reflects far too much expectation wrt consumer demand destruction. Only 6% of the CPI is comprised of home fuel oil/propane and transporation fuels. One could argue that even another 50% increase still won't HURT. More is spent by familites dining out each month...
Off topic: food is up 4% YOY in usa & 0.6% in canada
Doubling the price oil is probably the equivalent of 25% inflation when the total impact is considered.
This is complete nonsense. Economical models can easily correlate and predict crude price rises with the eventual effect on the CPI two years down the road...
And the proof is in the pudding: Crude has quadrupled since Iraq2, but in that 5 year span, the CPI has only drifted to 4%.
I agree Gandalf's number are nonsense. It is common knowledge that the higher margin a product is the less it is affected by energy costs.
Posted: Fri May 16, 2008 5:49 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
memmel wrote:
Its a open market products go to the highest bidder once we get to the point that storage no longer can be used to meet the variability in price/demand a permanent shortage condition effectively starts circling the globe. Its like a wave. One basically exists now for the poorest countries but we also have one developing for the wealthier buyers.
Okay, are you assuming China pays a higher price than US?
Posted: Sat May 17, 2008 7:22 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
nth wrote:
memmel wrote:
Its a open market products go to the highest bidder once we get to the point that storage no longer can be used to meet the variability in price/demand a permanent shortage condition effectively starts circling the globe. Its like a wave. One basically exists now for the poorest countries but we also have one developing for the wealthier buyers.
Okay, are you assuming China pays a higher price than US?
Well no everyone pays basically the same rate unless they have special deals this is outside the scope of the market but certainly effects it.
I'd say right now that somewhere in the world some country or region is low on fuel supplies and facing shortages this forces them to buy regardless of price. This price increase causes other regions to hold off on buying running down their own storage and making them the forced buyer. Other regions recognizing its best to keep on buying steadily since prices are higher later will. The net result is a upwards pressure on the market and increasing instability. Eventually some bets wrong and does not get oil and has a outright shortage.
At some point in the future the market gets spooked and everyone moves to storing as much as possible ( hoarding). Notice the US Government continuing to fill the SPR for example. Eventually of course the spot market breaks down as deliveries fail to arrive.
In other words you win get your oil contract but it does not show up.
You make get reimbursed but you don't get the physical oil.
Then things get really interesting. Now back on track to gasoline the gasoline export market sets on top of this underlying oil market and one would expect it to suffer first. At some point in the future countries will choose not to export gasoline because they are concerned about future supplies for the home markets. I think we may have passed peak gasoline exports already and we will see this summer but we have a really good chance that the US may not get the gasoline imports it needs this summer. If not this summer next summer. Maybe we get them this summer for example but the gasoline export market suffers a big price hike. So yes it will come but we pay through the nose. My best guess is that we refuse to pay someone else does aka china and then we get in trouble and try and buy but the physical gasoline just does not exist.
All that has to happen is for us not to buy gasoline and wait let china buy it let exporters that service the US gasoline import market let their oil stock drop because of high oil prices and then the US suddenly come back looking for gasoline then their is nothing anyone can do. Our suppliers need to get oil before they can get us gasoline. All it takes is a slip up and we don't have enough gasoline for export to the US. Simple market dynamics can easily result in a unintended shortage in the gasoline export market. If crude is now really tight then it may not be easily fixable i.e the gasoline export market may not be able to get the imports to refine for export without causing a shortage in the domestic market.
I call this the double export land model. So we would expect that well before oil shortages hit the US for the gasoline export market to be disrupted. As long as the US gets as much gasoline as it wants without a anomalous price spike vs oil then all is well. But once it does then we know that the market has entered a new phase.
My opinion is that the US will suffer shortages from lack of sources for importing gasoline in the near future while oil shortages may well not happen for several years. Americans will have to pay a lot more for gasoline if they want to maintain gasoline imports since they will have to compete against the needs of the local markets of the countries that export gasoline to us. The local market wants to store as much oil as possible and refine as little as possible and buy at oil at every price dip. America wants the world to ship it cheap gasoline when the price of oil is high.
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