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In Reply to: RE: Most will stay in the States and displace higher priced imported crude in Gulf coast refineries posted by Road Warrior on April 14, 2014 at 20:02:29
...than here? As I noted elsewhere, this is what a couple of recent WSJ articles state is already occurring regardless of source of crude.
Follow Ups:
About 365.65 million gallons (or 8.71 million barrels) on a daily average.
However, due to the vehicles gas mileage efficiency in the last 6 years offset this demand as the overall gasoline consumption has been reduced to about 6% less than the record high of about 142.35 billion gallons (or 3.39 billion barrels) consumed in 2007.
The U.S. exports very little crude oil (0.4% of gross supply in 2012,). Additional crude supplies via Keystone pipeline (domestic or from Canada) would serve to reduce imports from other nations and/or offset declining supplies from Mexico and Venezuela.
Also, another thing to note if the U.S. producers wants to export more crude oil overseas they need to receive a license from the Commerce Department before crude can be exported, and these licenses are not typically issued.
If a thing's worth doing, it's worth doing well
(Proverb)
...gasoline IS being exported from US.
on the domestic gasoline prices at the pump as in the overall scheme of things it only averages at about 13 million barrels/month.
If a thing's worth doing, it's worth doing well
(Proverb)
Edits: 04/15/14
...I'd link them but archived articles live behind a very steep paywall. Try the linked chart from US govt. 16.4 million bbls in Jan / 14 alone. That's enough to affect markets.
Later!
as it should have said 13 MMBBLS/M
If a thing's worth doing, it's worth doing well
(Proverb)
that's due to excess refinery capacity being utilized for such. An influx of Canadian crude will mostly displace foreign crude as refinery feedstock. Whatever excess capacity there was prior to that won't change. It'll mean we just import less oil from outside of north America which is generally considered to be a good thing, as are exports of refined products. I'm not saying no Canadian oil will be exported in its raw, unrefined, form. That oil, like any source of oil, will seek out markets with the highest potential return.
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"I'd like to own a squadron of tanks"
...gasoline is exported because those importing it are willing to pay more for it than are certain elements of the domestic market. Getting more crude to the gulf coast will simply make gasoline less costly to export so more will go overseas. The net effect of reducing crude transportation barriers wiil be to allow the price of it to more perfectly reflect the worldwide market. Net effect for worldwide consumers will probably be stabilized or maybe reduced gasoline costs. Net effect for US consumers will probably be increased gasoline costs because current costs are lower than overall world market.
Doesn't seem to be a huge potential for WTI uplift. But, to agree with you on one point, of course the price will end up being higher in the mid continent region. Product is going to be moved away from those markets, where there's a relative overabundance of crude, to markets where this overabundance doesn't exist. This has been going on since time immemorial. In theory the effect will be beneficial to consumers in the gulf coast area.You state additional exports of gasoline will be beneficial to worldwide markets. I disagree.
There are only xxx bbls of refining capacity in gulf coast refineries. There are xxx bbls of domestic demand those refineries are filling. Excess capacity being used is currently exported. Oil from the Keystone Pipeline won't change that balance.
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"I'd like to own a squadron of tanks"
Edits: 04/15/14
Folks who are interested in the economics of the oil & gas industry should go to www.InsideAutomotive.com, then click on "News Sources". On that webpage, several oil industry sources are listed. You'll find more oil & gas news and statistics than you'll have time to read.RW: The spread today is about $5.50.
Checking the NYMEX, WTI is hovering around $104.50. Chevron is up nicely, Total is down a bit, Valero continues it's soaring streak, CNOOC is up but still down substantially from its high of around $220. Even Obama's oil pick from a few years ago, Petro Brasil, is up a few cents to $13.38, although still WAY down from the $40-$45 when he was talking about it.
:)
Edits: 04/16/14 04/16/14
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