Comments are welcome, but I just want to see how this works out.
In 2013 when gas prices topped $3.00/gallon the Hannity board once again discussed the matter.
http://forums.hannity.com/showthread.php?2438005-Gas-prices-keep-rising
Comments are welcome, but I just want to see how this works out.
In 2013 when gas prices topped $3.00/gallon the Hannity board once again discussed the matter.
http://forums.hannity.com/showthread.php?2438005-Gas-prices-keep-rising
I’ll play!
Gas prices are going up , and it doesn’t appear to be the usual seasonal changes.
The primary driver right now appears to be OPEC successfully reversing their strategy of flooding the markets to punish US shale producers and enforcing production quotas, of which Russia has been holding to as well, changing the market from a glut to getting more in line with where the O&G likes things to be.
Venezuela is basically a failed state and production has been collapsing, something like by 100K barrels a month.
There’s probably a few dollars of oil shock money built in there with Middle Eastern instability.
I wouldn’t expect US production, at least in W. Texas, to be able to produce our way out of it short term, pipelines are pretty much at capacity. Canadian dilbit production is ramping up because it’s well suited for Gulf Coast refineries, there is pipeline capacity, but that stuff is expensive relative to Texas Tea.
If the US backs out of the Iran deal, hold on to yo’ hats with regards to oil prices.
OTC here in Houston starts next week and for the first time in like4 years myself and a lot of friends and co workers are looking forward to it, been pretty rough for us for a while.
and they raised the gas tax in Cal. Another reason to vote republican out here… I doubt it will hit 100$ a barrel again, too much fracking profit before 100 a barrel, but it does show a great economy.
What is OTC?
I never expected gas prices to stay as low as they were a couple of years back. No way the US can produce profitably at ~30 /bbl.
Here in PA it’s starting to drift above $3.00 a gallon for regular. PA sucks because our Republican former governor pushed through a huge tax increase on gas.
He didn’t want a severance tax on natural gas. That went belly up for a while here too when the prices were too low. Looks like it is starting to pick up again. Seeing lots of Texas/OK/LA plates around here again.
Sorry, “Offshore Technology Conference”, oil and gas industry trade show. One of if not the biggest in the world.
Tell me more about pipeline capacity.
Edit: Please.
Keep in mind, I’m an upstream (drilling and completions) guy, not a midstream (pipeline and transportation) or downstream (refining) guy, but through things I read, usually from people that are in my network on LinkedIn, I keep at least an ear as to whats happening with mid and downstream.
From what I’ve read, Permian pipeline will reach “takeaway”, as in full capacity probably in a few months. The earliest I’ve read that any new pipelines will be constructed won’t start until until early 2019.
Yeah, they were discussing exactly that, lackof pipeline and refining capacity and the Permian Basin and foreign refineries refining our gas for us , this morning on bloomberg (financial) tv.
I am predisposed to blame"liberals" for all the bottlenecks, but, while Im sure bottlenecks are driving prices up it could also be
IOW as much as I am sure of the solution, (end bottlenecks, expand pipeline and refinery capacity), I’m really just guessing when I say “liberals” are causing the bottlenecks.
Yeah, they were discussing exactly that, lackof pipeline and refining capacity and the Permian Basin and foreign refineries refining our gas for us , this morning on bloomberg (financial) tv.
Gulf Coast refineries struggle with light sweet crude like you get from W. Texas, they’re built for heavy sour. That’s why they’re exported for refining.
Your real enemy is the free market. The Wolfcamp and Spraberry trends in W. Texas are relatively new plays, and they didn’t start to come online hard until oil prices started collapsing 4-5 years ago.
Oddly enough, the free market is a little shy on billion dollar CAPEX projects with commodities that are in the tank.
The “no new refineries” thing is sooooo 2004. You yourself posted how much refinery capacity has increased, with “no new refineries”. Refining is a process that unless you’re running at 90+% capacity, you’re losing your ass in a necessary evil, thin margin business. When there start to be spot shortages of gas and refined petroleum products in markets, then the markets will have determined additional refinery capacity is needed and it will be added.
Until then, meh.
Actually the numbers I posted showed no significant increase in domestic refining capacity.
I’ll look for 'em again.
Here it is:
Yeah here it is.
CNN says that since 1976 demand for gasoline has increased considerably US no new refineries have been built in the US and US output has flatlined.
When gasoline prices surge, a lack of refining capacity is often blamed - what's being done, and will it continue?
…Nothing really happens. Next year, repeat story.
So why hasn’t a new refinery been built in the U.S. since 1976?
“There have been calls every year this decade for new refining capacity, yet no new projects initiated,” said Geoff Sundstrom, a spokesman for AAA, the motorist organization. “Refining capacity has not kept pace with demand for gasoline.”…
…In 1995 American drivers burned about 17 million more gallons of gasoline a day than the country produced…
By 2005, the latest figures available, the gap had widened considerably to about 36 million.
From the hippies at the EIA
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=8_NA_8D0_NUS_4&f=A
US Crude oil refining capacity:
In 1983 was 17,889,734 barrels per day.In 1993 was 15,120,630 barrels per day.
In 2003 was 16,757,370 barrels per day.
In 2013 was 17,823,659 barrels per day.
In 2017 was 18,617,027.
How do you spell bottleneck?
So there spot shortages of gasoline and refined petroleum products happening in the US? No?
Then there is adequate refinery capacity.
So there spot shortages of gasoline and refined petroleum products happening in the US? No?
Then there is adequate refinery capacity.
Not the definition I would have used,
although, it may just be CHEAPER to refine oil into gasoline etc. in Canada and Mexico and import the gasoline.
But then why would CNN title an article
"Behind high gas prices: The refinery crunch" ?
I didn’t get the idea from CNN. Probably from some righty contributor on a FOXNews show like Hannity (and Colmes.)
and that is probably where I got the idea to blame lefties.
One thing I DEFINITELY did not know is that there are different pipelines for different types of crude.
I’m not sure that matters much tho. If West Texas produces one type if crude it needs one type of pipeline. If it produces two types of crude, it needs two types.
A gallon of crude weighs 7.21 lbs (I hadda look it up ), so a barrel weighs 302 lbs.
No matter what economies of scale, more pipelines, cheaper pipelines, cheaper oil tankers, etc. we invent or use, it’s prolly gonna cost a lot to move 302 lbs from the Arctic circle, Venezuela, etc. etc. to American urban centers.
So, oil prices going up along with gas prices now, right? Retail price of gas goes up $.24 for every $10 increase in the bbl. oil price.
When demand (price) for gas increases folks bid higher and higher prices for oil transported from the Arctic circle to Chicago.
OTC here in Houston starts next week and for the first time in like4 years myself and a lot of friends and co workers are looking forward to it, been pretty rough for us for a while.
Yes it has and I am sincerely glad thinks are picking back up for you. I’ll gladly pay $3 to get you boys back to work and out of the beer joints.
When demand (price) for gas increases folks bid higher and higher prices for oil transported from the Arctic circle to Chicago.
Um, Arctic production is like 2.5% of US production, so I’m not really sure what you’re doing there.
Hiring has recovered somewhat, but I still hear a lot of complaining from people trying to find work. During the downturn, “efficiencies” were the name of the game and a lot of jobs on a rig were automated. There also seems to be a 50 year old age cap, I know some very qualified pet. engineers who can’t even get a sniff and they’re convinced it’s because of ageism. But by and large there are a lot more jobs out there for sure.