Hoarding is exactly what the government is doing right now by filling the SPR, and frankly it's the best thing that could happen. It drives prices up. High prices encourage demand destruction. They also finance new well development. The hoarded oil gives us a buffer to fall back on once shortages become more prevalent. High prices are what we need in order to adapt to what's coming, and the sooner they happen, the better.
Oil Movements has suddenly revised its OPEC shipment projection downwards. Lower shipments are blamed on falling demand for high-sulphur oil that is difficult to refine:
Quote:
7/19/07 Oster Dow Jones 15:30:53
July 19, 2007
DJ OPEC Oil Exports In 4 Wks To Aug 4 Seen -240,000B/D -Tracker
LONDON, Jul 19, 2007 (Dow Jones Commodities News via Comtex) -- Seaborne OPEC oil shipments are expected to fall by 240,000 barrels a day in the four weeks to Aug. 4 from the previous one-month period because of weak demand for high-sulfur oil in the West and less attractive financial terms for storing oil that are also cutting into demand, U.K. tanker tracker Oil Movements said Thursday.
Shipments from Organization of Petroleum Exporting Countries are expected to fall to 23.95 million barrels a day from 24.19 million barrels a day in the four weeks to July 7, said Roy Mason, head of the consultancy.
"It's a demand issue. Weak demand for sour crude in the West, but it's not altogether surprising because U.S. stocks are healthy," Mason said, referring to high-sulfur, or sour, oil that is more costly and difficult to process for refiners that prize low-sulfur crudes.
Sailings from key OPEC Middle East countries, whose spare oil production capacity comprises mostly sour crudes, are seen dropping 380,000 barrels a day.
The recent pricing structure known as "backwardation," when front month futures contracts trade at a premium to longer dated contracts, was also making it less profitable to hold oil in storage. This, Mason said, was further eating into demand for OPEC oil.
Mason estimated that OPEC now had about 1 million barrels out of the market as a result of decreased consumption from refiners. "OPEC compliance is near its highest level," he said, referring to the group's adherence with its two output reductions that started taking effect last November.
(END) Dow Jones Newswires
07-19-07 1130ET
[sorry I do not have a link yet] _________________ It's already over, now it's just a matter of adjusting.
It seems like there is no question here. They are Fark, and by extension, we are more so. _________________ We stand here, as the light of other days surrounds us.
"Hail the Dead"
We have been hearing of the huge reserves that are in the Middle East for a long time. Unfortunately, no one took a close enough look at reserves of what?
We have been hearing of the huge reserves that are in the Middle East for a long time. Unfortunately, no one took a close enough look at reserves of what?
Camel crap, obviously. _________________ Joe P. United Political Debate
"Only when the last tree is cut; only when the last river is polluted; only when the last fish is caught; only then will they realize that you cannot eat money." - Cree Indian Proverb
So, what is the big deal? Their oil is sulphurous. That means they are close to or over peak production and the inflated numbers given for ME countries' oil reserves in the later 80's were bogus. So, how many years does that give the US etc to continue to import at least as large quantities of oil from SA etc as it currently is, 2, 3, 5 years?
g
Posted: Fri Jul 20, 2007 12:12 am Post subject: Re: Oil Movements - OPEC Shipments Falling
Interesting.
"Shipments from Organization of Petroleum Exporting Countries are expected to fall to 23.95 million barrels a day from 24.19 million barrels a day in the four weeks to July 7, said Roy Mason, head of the consultancy"
I think the elephant in the room here is that what's fallen is overall shipments, while the explanation:
"It's a demand issue. Weak demand for sour crude in the West, but it's not altogether surprising because U.S. stocks are healthy,"
...Is all about sour crude. Of course stocks are healthy. We can't use it. I have to agree with joewp here: It may as well be camel dung.
And then of course - were we using sour crude at a higher rate and it suddenly fell by 240,000 barrels a day? Does anyone know if this is a reasonable explanation?
Seems lately all the news is about investing in ethanol - any companies investing in refining sour crude? I've heard there hasn't been much in this area in the last few decades - anyone have a scoop on that? Looks like there's going to be a lot more of that to go around than the light stuff. :/
Posted: Fri Jul 20, 2007 12:28 am Post subject: Re: Oil Movements - OPEC Shipments Falling
Quote:
The recent pricing structure known as "retardation," when front month futures contracts trade at a premium to longer dated contracts, was also making it less profitable to hold oil in storage.
It's comforting to know that the pricing, delivery and storage of the single most important resource for the continuance of industrial civilization is determined by casino style gambling.
No wonder why the price at my local gas station bounces around like the ball on a roullete wheel.
"Snake eyes! Put it all on NYMEX Light Sweet Bill."
(BTW, that's Dick Cheney with his arms up in the back.)
Joined: Oct 23, 2004 Posts: 5182 Location: New Jersey
Posted: Fri Jul 20, 2007 7:59 am Post subject: Re: Oil Movements - OPEC Shipments Falling
I have been unable to find a link for the lead article, however all the important points are mentioned above - snd this story was also mentioned on CNBC-TV.
It's not clear which country is reducing exports, but my guess is Saudi Arabia - being that is produces much sour oil - and was undergoing some type of multi-week maintenance in July.
I previously posted somewhere on PO.com that the huge Ras Tanura oil processing plant was going to be undergoing 'maintenance'. This article about a fire there confirms the report about 'maintenance'.
Quote:
BBC Newsfile
Copyright 2007 BBC Monitoring Service
July 20, 2007
Saudi daily says one killed in Aramco facilities blaze 19 Jul
Text of report in English by Saudi newspaper Arab News website on 20 July
[Unattributed report from Dhahran: 1 killed, 13 injured in Ras Tanura blaze]
A fire that broke out at Saudi Aramco's North Product Terminal in Ras Tanura yesterday killed one worker and injured 13 others, according to a source that requested anonymity.
The accident occurred at about 9.30 a.m. while some maintenance work was going on, according to a Saudi Aramco statement released yesterday.
The fire was brought under control after one hour at around 10.30 a.m., the statement said. Two Filipino workers were reported missing shortly after the fire broke out, but one of them was located later with burns and subsequently died of his injuries.
Though the accident resulted in some injuries, it did not affect production and loading works, Saudi Aramco said in an earlier statement before the worker died.
A technical committee has been appointed to investigate the cause of the accident, Saudi Aramco said.
Source: Arab News website, Jedda, in English 20 Jul 07
Gulf News _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5182 Location: New Jersey
Posted: Fri Jul 20, 2007 11:11 am Post subject: Re: Oil Movements - OPEC Shipments Falling
Oil Movements not specifically mentioned here, but that's what they are talking about:
Quote:
07.20.07, 7:02 AM ET
Meanwhile overall sentiment towards the oil complex is still erring on the bullish side. The IEA has said demand is set to rise strongly, while OPEC has steadfastly refused to raise its crude output in the face of rising oil prices.
OPEC oil exports in the four weeks to August 4 are seen falling 240,000 bpd from the previous month, according to press reports.
Kevin Norrish, an analyst at Barclays (nyse: BCS - news - people ) Capital, said while the price rally over the last few days was probably a bit overdone, it is difficult to see why prices shouldn't close strongly today.
'We've had the IEA making some fairly significant noises about the need for increased OPEC production so there's been a swift turnaround in attitude from one where people thought crude was well supplied to one where, even though inventories are high, expectations are that they will tighten and fall,' he said.
BTW - The Ras Tanura fire follows aleaky pipeline problem only one week earlier:
Quote:
3:14 PM ET Jul 12, 2007
A leak in a crude pipeline in eastern Saudi Arabia has been contained without interruptions to its oil flows, Dow Jones Newswires reported. The pipeline feeds Saudi Aramco's refinery Ras Tanura, the country's largest.
DJ Saudi Aramco Contains Leak In Ras Tanura Refinery Pipeline
DUBAI, Jul 12, 2007 (Dow Jones Commodities News via Comtex) -- .
A leak in Saudi Arabian Oil Co.'s AQ-6 crude oil pipeline in the east of the country has been detained without interruptions to its oil flows, the company said Thursday.
The leak occurred at the pipeline's intersection with the Abqaiq-Dammam highway during reconditioning activities, Saudi Aramco said in a statement.
The pipeline feeds Aramco's Ras Tanura refinery, the country's largest.
[no link] _________________ It's already over, now it's just a matter of adjusting.
Posted: Fri Jul 20, 2007 11:27 am Post subject: Re: Oil Movements - OPEC Shipments Falling
jbrovont wrote:
Seems lately all the news is about investing in ethanol - any companies investing in refining sour crude? I've heard there hasn't been much in this area in the last few decades - anyone have a scoop on that?
Valero has been expanding their refining capacity, and marketing themselves as a leading sour crude refiner. They have been acquiring refineries, updating them to handle heavy crudes (at $$$) and, between the increasing number of unintended repairs and 'incidents,' they've also been turning a tidy little profit on the side. Of course, this doesn't get all the "rah-rah cheer for the home crowd" coverage that ethanol gets here in the U.S., but it's certainly no less real.
Also, the Saudis were supposed to be constructing large refineries (300k-400kbpd) to handle the sour crudes, but I don't know where those plans lie right now. _________________ “I'm completely in favor of the separation of Church and State. My idea is that these two institutions screw us up enough on their own, so both of them together is certain death.” George Carlin
Joined: Oct 23, 2004 Posts: 5182 Location: New Jersey
Posted: Fri Jul 20, 2007 11:46 am Post subject: Re: Oil Movements - OPEC Shipments Falling
emersonbiggins wrote:
jbrovont wrote:
Seems lately all the news is about investing in ethanol - any companies investing in refining sour crude? I've heard there hasn't been much in this area in the last few decades - anyone have a scoop on that?
Valero has been expanding their refining capacity, and marketing themselves as a leading sour crude refiner. They have been acquiring refineries, updating them to handle heavy crudes (at $$$) and, between the increasing number of unintended repairs and 'incidents,' they've also been turning a tidy little profit on the side. Of course, this doesn't get all the "rah-rah cheer for the home crowd" coverage that ethanol gets here in the U.S., but it's certainly no less real.
Also, the Saudis were supposed to be constructing large refineries (300k-400kbpd) to handle the sour crudes, but I don't know where those plans lie right now.
They are planning to build a 400.000 bpd refinery by 2012 at Ras Tanura using sour, heavy crude - but they are going to use that all internally.
In addition, they are buidling a massive new plant for petrochemicals. This plant will use the existing 550,000 refinery capacity of Ras Tanura.
Altogether, after this, Saudi Arabia may increase oil output and capacity - but may be exporting less oil from Ras Tanura after these plants are finished. It depends on whether the oil used for petro-chemicals exceeds the new refined domestic supplies from the new 400,000 bpd refinery. In any case, when the new plants come on line, it appears it won't make much if any difference as far as their export capacity goes.
Quote:
US firm wins Saudi plant contract
by Reuters on Thursday, 12 July 2007
Saudi Aramco and U.S. firm Dow Chemicals have awarded the project management for the construction of the giant Ras Tanura petrochemical plant to U.S.-based KBR, Aramco and Dow said on Thursday.
The plastics and chemicals plant at Ras Tanura will be one of the largest of its kind to be built from scratch and has an estimated cost of over $20 billion. Dow's investment in the plant is expected to be the largest foreign investment to date in the Saudi energy sector.
Saudi Arabia, like its Gulf Arab neighbours, is making major investments to capitalise on its energy reserves and diversify its economy away from oil. The kingdom holds the world's largest oil reserves and its fourth-largest gas reserves.
Arabian Business _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5182 Location: New Jersey
Posted: Sat Jul 21, 2007 11:46 am Post subject: Re: Oil Movements - OPEC Shipments Falling
A little off topic, but again, the Ras Tanura refinery processes sour crude and they are having problems there.
Press TV - Iran
Quote:
Ras Tanura blaze disruption
Saudi Arabia:
A fire which broke out in berths undergoing maintenance at Saudi Aramco's Ras Tanura facility last Thursday has led to the closure of the plant's North Terminal, according to the Dow Jones newswires. Aramco has said operations are continuing from alternative berths and has also stressed that naphtha loading is ongoing.
Saudi's Aramco says four foreign employees killed in fire incident this week
Published: July 21, 2007
RIYADH, Saudi Arabia: State-run Saudi Arabian Oil Co., or Saudi Aramco, said Saturday that four of its foreign employees died in a fire this week at the Ras Tanura terminal on the country's east coast.
The company's Web site carried a statement which said the four included two Filipinos, an Indian and a Sri Lankan worker. Also, 12 other employees were injured in the blaze, including one Saudi national.
The blaze at Ras Tanura oil terminal, off the Dhahran district on the kingdom's eastern coast, broke out 9:30 a.m. local time Thursday but was brought under control within an hour, Aramco said.
Aramco's statement said the incident did not interrupt the facility's crude oil or product operations, adding that the company and Saudi authorities are investigating the fire.
Thursday's blaze was Aramco's second incident in less than a year. Last September, a fire at another oil refinery on Saudi's eastern cost killed one worker.
Joined: Oct 23, 2004 Posts: 5182 Location: New Jersey
Posted: Thu Jul 26, 2007 10:51 am Post subject: Re: Oil Movements - OPEC Shipments Falling
Updated Oil Movements forecast issued today:
Quote:
OsterDowJones
Dow Jones & Company, Inc.
July 26, 2007
DJ OPEC Oil Exports In 4 Wks To Aug 11 Seen +90,000 B/D -Tracker
LONDON, Jul 26, 2007 (Dow Jones Commodities News via Comtex) -- Seaborne OPEC oil shipments are expected to rise by a negligible 90,000 barrels a day in the four weeks to Aug. 11 from the previous one-month period, but current tanker market signals point to no sustained upturn in oil exports from the 12-nation producer group, U.K. tanker tracker Oil Movements said Thursday.
Shipments from Organization of Petroleum Exporting Countries are expected to increase to 24.03 million barrels a day from 23.94 million barrels a day in the four weeks to July 14, said Roy Mason, head of the consultancy. Increased shipments from Nigeria drove part of the rise, he said, as previously shut-in oil output there returns to service.
But sailings from key OPEC Middle East countries are forecast to drop by 40,000 barrels a day.
"It's still very unseasonal activity we're seeing for this time of year" when OPEC sailings are substantially higher, Mason said.
The pricing structure known as "backwardation," when front-month futures contracts trade at a premium to longer dated contracts, continued to "disincentivize" putting oil into storage and, thus, limit demand for OPEC crude, Mason said.
Oil Movements forecasts future OPEC exports based on spot and term chartering of crude from OPEC member countries. OPEC production meets almost 40% of the 86 million barrels a day consumed globally.
(END) Dow Jones Newswires
07-26-07 1130ET
[sorry, no link] _________________ It's already over, now it's just a matter of adjusting.
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