Posted: Sun Jun 10, 2007 7:11 pm Post subject: Re: Refinery outages = market manipulation?
threadbear wrote:
The oil market is not highly"fungible" I live in Canada and we ae quite aware that we are at the disposal of the US when it comes to our vital natural resources. If push comes to shove, all other contracts are cancelled and the US is served first. Oil is sold by contract and prearrangment and within the scope of trade treaties. It was probably more fungible in the past, not so much now.
Are you trying to tell us that Canada can only sell Canada oil to the US? What...they put a radioactive tracer in it? A dye?
The US, until about 1989, sold almost all it's Alaskan oil to Asia and bought oil from Venezuela instead.
Why?
Lack of West coast refining capacity.
Cheaper to do that than transport it around Tierra del fuego or through the Panama Canal.
Canada is prohibited from meeting their oil contracts with oil from other countries? Fungible oil?
Let 's see the evidence to support that. _________________ A Saudi saying, "My father rode a camel. I drive a car. My son flies a jet-plane. His son will ride a camel."
Live in Arizona? Check out: http://sustainablearizona.org and read my blog.
Posted: Sun Jun 10, 2007 10:37 pm Post subject: Re: Refinery outages = market manipulation?
MonteQuest wrote:
threadbear wrote:
The oil market is not highly"fungible" I live in Canada and we ae quite aware that we are at the disposal of the US when it comes to our vital natural resources. If push comes to shove, all other contracts are cancelled and the US is served first. Oil is sold by contract and prearrangment and within the scope of trade treaties. It was probably more fungible in the past, not so much now.
Are you trying to tell us that Canada can only sell Canada oil to the US? What...they put a radioactive tracer in it? A dye?
The US, until about 1989, sold almost all it's Alaskan oil to Asia and bought oil from Venezuela instead.
Why?
Lack of West coast refining capacity.
Cheaper to do that than transport it around Tierra del fuego or through the Panama Canal.
Canada is prohibited from meeting their oil contracts with oil from other countries? Fungible oil?
Let 's see the evidence to support that.
Again, not what I posted.
A quantity of the same grade of crude is obviously going to be relatively more fungible with another equal quantity of the same grade with the difference largely in shipping cost. I can see a point coming where say light-sweet crude is only available from certain ME countries potentially hostile to the US. This would raise the scenario of no crude of that type available at any price to the US but only to neighbors friendly to the producing countries. My point is simply that the political factors become a larger influence to the fungibility issue as depletion continues. Why do you think US politicians beat the 'energy independence' drum so loudly. And, correspondingly, why are the Saudis wary of customers switching to 'other' types of energy?
Joined: Oct 23, 2004 Posts: 5514 Location: New Jersey
Posted: Mon Jun 11, 2007 1:36 pm Post subject: Re: Refinery outages = market manipulation?
Quote:
Refinery Costs Pinch U.S. Gasoline Supply
Companies Remain Wary of Adding Capacity
By ANA CAMPOY and RUSSELL GOLD
June 11, 2007 2:49 p.m.
The cost of building or even expanding oil refineries is rising rapidly, contributing to delays in increasing the U.S. gasoline supply at a time of near-record prices.
The oil industry is blaming cost escalation -- driven by shortages of skilled labor and construction services, along with higher materials prices -- for a spate of pushed-back or scrapped expansion projects. Valero Energy Corp., the U.S.'s largest refiner in terms of the amount of crude it can refine, has delayed expansions in Quebec, Canada, and in Texas. ConocoPhillips has put off projects at refineries in Texas and in Louisiana, while Tesoro Corp. canceled the installation of new equipment to process cheaper crude at a facility in Anacortes, Wash.
Even today, with prices high, refiners are loath to build new facilities for those environmental and regulatory reasons, as well as concerns that fuel prices might moderate long-term. Instead, the industry has invested in expanding or modernizing existing facilities, resulting in gradual output increases.
The swiftly rising costs of building new refineries compounds the industry's trouble in keeping pace with growing fuel demand world-wide. With demand soaring again, the industry's attempts to catch up are overwhelming the engineering and construction capacities to build refineries, as well as the global market for specialized refining equipment.
Article goes on to say basic construction costs and labor costs have risen greatly since 2004. _________________ It's already over, now it's just a matter of adjusting.
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