I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Wed Aug 27, 2008 5:19 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
My understanding is that ethanol is only counted at the refinery site or when it is mixed with some other compound.
The EIA also doesn't release information as to how much of the total amount of blending components are related to ethanol. _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Thu Aug 28, 2008 5:13 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
It looks like after a temporary reprieve, supplies at the end of the pipeline in the upper Midwest are approaching MOLs again:
Quote:
Some fuel terminals have short-term outages
By BLAKE NICHOLSON , Associated Press
Last update: August 27, 2008 - 5:37 PM
BISMARCK, N.D. - Industry officials say they are mystified by fuel shortages at terminals in the Upper Midwest in recent days, but they expect enough supplies for the Labor Day holiday weekend.
Terminals have run out of fuel in West Fargo and Grand Forks in North Dakota; Alexandria, Minn.; and Sioux Falls, S.D.
Officials are trying to figure out why.
Bruce Heine, a spokesman for Magellan Midstream Partners LP, which runs a network of pipelines and distribution terminals, said gas and diesel were being delivered to Sioux Falls, West Fargo and Alexandria, and diesel to Grand Forks. The terminal in Grand Forks was still without gas.
Star Tribune _________________ It's already over, now it's just a matter of adjusting.
Posted: Fri Aug 29, 2008 2:36 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
"We're being told that the next six to eight weeks could be touch and go from our sources," Rud said. "At this point in time, we're kind of taking a wait-and-see approach."
Joined: Apr 06, 2006 Posts: 3615 Location: 3 miles NW of Champoeg, Republic of Cascadia
Posted: Fri Aug 29, 2008 1:38 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Gail at TOD explains the decline of finished gasoline in inventory thusly:
Quote:
I think the drop is caused by a change in the way gasoline is made. When it was made with MTBE, it could be blended in the refinery, and stored that way. When gasoline has neither MTBE or ethanol in it, it can also be stored that way.
If gasoline is made from RBOB + ethanol, these two are transported and stored separately. They are probably considered "blending components". The big shift toward ethanol has been in the last few years. Because of this, the stock of blending components is rising, while the stock of finished gasoline is falling.
Now, here is a short PDF on Pipeline Considerations for Ethanol. Can't post an excerpt as it's copy protected, but it's a good gloss of known issues with pipeline transport. They mention Williams Energy running a test on a line with ethanol and concluding that frequent dewatering by pigs and possibly even implementation of a filtering system would be required to use existing lines on a regular basis.
It seems to me that if levels of pure gasoline keep going down MOL would be reached in individual lines, or PADDs; or it would impact profitability for owners of those lines; or lead to problems that haven't been foreseen due to the change in distribution models. Also the strain on other forms of transport to use more ethanol blends would preclude their use by standard gasoline, which could hamper distribution in a shortage. And since truck/rail/barge transport is more expensive than by pipe, higher oil prices will jack up the shipping costs of course.
Ownby said TEPPCO transported a test batch of ethanol from Indianapolis to an Argo, Ill., facility in May 2007 – a distance of about 150 miles. “We haven’t looked at the long-term effects yet,” he said. “We did extensive testing of the ethanol product quality and found that the most significant find was color change – it turned a dark amber color.”
Other than short distances, Ownby said there are currently minimal ethanol pipeline in the United States. “Pipeline companies are all working for it, but we need to work together to solve the biggest problem – stress crack corrosion,” he added. “We can’t jeopardize the pipelines until we know exactly why it happens and how will affect the pipelines.”
_________________ Cogito, ergo non satis bibivi
The Dude Is Not In: Leave A Message After The Beep.
BP Texas City 437 0.5 219 133 63 -
Valero Texas City 209 0.85 178 108 52 -
Marathon Texas City 72 0.85 61 37 18 -
Crude Inputs 6,003 4,79 2,92 1,390 UnleadeDistillates
Reduced Refinery Output 1,17 557
Reduced Crude Oil Inputs 1,920
% of GC 0.40072
% of US 0.13
Of course, I am just some guy on the internet, so naturally, if you have other information to the contrary, or if I am in error on any of this above, feel free to advise me and I will fix it. However, it looks like to me that if this stuff goes on for any length of time, we could really easily be screwed.
Per day, I am estimating about 1.1 million barrels of unleaded production is being lost and another .55 million barrels distillates, give or take, for every day these refineries are shut down. That's before any of the crap spreads to the giant refineries in Baytown and Baton Rouge, which it could easily do if what happens is what they say what will happen, and each of these friendly places gets 25 inches of rain. My little spreadsheet is set up so we can keep track of how many days this goes on, and know the gross effects on the inventories, which we like to keep track of.
We don't even want to think about what might happen if this guy takes a little bit of a left, and ends up around Houston.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Mon Sep 01, 2008 4:02 pm Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Here's a good explanation as to why gasoline inventories are so low:
Quote:
September 1, 2008 5:41 p.m.
Refiners operate a just-in-time inventory system, holding relatively little gasoline in stocks. This has been especially true this summer, as the weak national economy has pushed down gasoline demand and margins. Fearing an oversupply of petroleum products, refiners responded by slowing production and avoiding building up a big inventory.
"We essentially destroyed the safety net if there was a catastrophic event in the Gulf of Mexico," says Tom Kloza, chief oil analyst at the Oil Price Information Service in Wall, N.J.
While the nation maintains a strategic reserve of crude oil, which is released when there's a sudden supply disruption, there is no comparable gasoline reserve. Even as the industry made numerous changes to better prepare critical equipment to withstand a hurricane, there has been no regulatory or political move since 2005 to change this situation. "There are no extra barrels put away for this eventuality," says Mr. Kloza. "We remain at risk because of the just-in-time inventory."
Effectively, European commodity traders have served as an unofficial gasoline reserve. They moved quickly in 2005 and could do the same now to charter tankers and deliver gasoline into U.S. ports such as Newark, N.J., and Boston.
WSJ _________________ It's already over, now it's just a matter of adjusting.
The inventory report will come out on Thursday this week because of the holiday. Also, all of the outages, downtime and other stuff from Gustav will not show up until next week.
I looked at the unleaded inventory above, and worked on it for quite a while, and I cannot see anything but a little build. I have assumed 1 mbpd imports (after the strong week last week) and refinery utilization of about 86%, which is the moving average we have seen lately, and based on that, production of 9.1. I believe demand will be the key number, and I have assumed that the two week trend of no gap between Products Supplied and Balance Demand will continue into the fall. If I am wrong on demand, and everyone in Houston went out and filled up on Thursday, then this will be close to a break-even or even a drawdown.
For the distillates, with the current production, inventory and demand, a little build is also in order.
For crude oil, using the little algorithm we developed, we should see just over 14.8 crude oil imports, a little lower production, and imports of 10.2. I believe imports will be strong for another week, and then start to ease way off in September, even discounting the effects of the hurricane.
As calculated above, once we get to next week's report, we will be looking at almost 2 mbpd lower refinery production and 2 mbpd less crude oil demand than we saw last week, and this situation will go on for quite a while.
So next week is where we will have some fun trying to figure out what happened.
Nineteen of the 22 major gas pipelines serving the gulf had declared force majeure, idling operations an all offshore segments of their systems.
The Sabine Pipeline gas system declared force majeure because of mandatory evacuations in Vermilion Parish, location of all of its receipt and delivery points and of the Henry Hub interconnection, the delivery point for gas-futures contracts on the New York Mercantile Exchange.
Also closed were the Strategic Petroleum Reserve facilities at Bayou Choctaw and West Hackberry, La., and at Big Hill, Tex. The Bryan Mound, Tex., SPR facility remained in operation.
The DOE office noted that 28 major gas processing plants lie in the path of the storm and were shutting down because of mandatory evacuations in Louisiana and shut-down of gathering lines.
_________________ Cogito, ergo non satis bibivi
The Dude Is Not In: Leave A Message After The Beep.
Posted: Tue Sep 02, 2008 7:16 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
Quote:
Unleaded Distillates
Aug 19, 2005 9471 4028
Aug 26, 2005 9406 4051
Sep 02, 2005 9027 3995
Sep 09, 2005 8636 3906
Sep 16, 2005 8819 3869
Sep 23, 2005 8836 3835
Sep 30, 2005 8840 4034
Oct 07, 2005 8783 3909
Oct 14, 2005 8961 3900
Oct 21, 2005 8981 4293
Oct 28, 2005 9045 4066
Just for the record, here is the products supplied for the several weeks after Katrina hit, at about this time in 2005.
Usually right after labor day, you see a big drop in demand anyway, but in the case of Katrina, this was immediate, and I guess if you extrapolate between the 9.4 and 8.8 you can make the argument that the effects of the actual storm were something on the order of .3-.4 mbpd nationwide reduction in demand.
Also, there is the problem of trying to figure out what the base demand is right now anyway.
interestingly, the demand in the past several weeks has been on the order of the 2005 demand anyway (9.4 or 9.5 mbpd) and so it is likely that the products supplied reported next week will be something like 9.0 or 9.1 mbpd for unleaded.
It will be interesting to see. I will stick with my current estimate of about 9.5 mbpd "balance demand" for this week, and maybe make an adjustment next week of around .2 mbpd for demand, just to see what happens.
For distillates, there was maybe one week of .1 lower demand that happened closer to when Rita hit.
I guess what I am saying is that if we are expecting a big rush of demand caused by people evacuating this series of storms we have coming up, it might be just the opposite.
Posted: Tue Sep 02, 2008 7:59 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
pup55 wrote:
Just for the record, here is the products supplied for the several weeks after Katrina hit, at about this time in 2005.
Usually right after labor day, you see a big drop in demand anyway, but in the case of Katrina, this was immediate, and I guess if you extrapolate between the 9.4 and 8.8 you can make the argument that the effects of the actual storm were something on the order of .3-.4 mbpd nationwide reduction in demand.
The nationwide price of unleaded went from $2.25 to $3.10 within 10 days of Katrina. That probably helped the demand destruction quite a bit. If we get a 38% bump this time (straight to $5), we'd surely have some demand destruction. We'll see if that happens this year, but indications are currently "no". _________________ At 1% annual growth, human bodies will incorporate every gram in the observable universe in approximately 10,170 years.
Joined: Apr 08, 2007 Posts: 488 Location: Cleburne, TX, USA
Posted: Tue Sep 02, 2008 8:23 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
lawnchair wrote:
pup55 wrote:
Just for the record, here is the products supplied for the several weeks after Katrina hit, at about this time in 2005.
Usually right after labor day, you see a big drop in demand anyway, but in the case of Katrina, this was immediate, and I guess if you extrapolate between the 9.4 and 8.8 you can make the argument that the effects of the actual storm were something on the order of .3-.4 mbpd nationwide reduction in demand.
The nationwide price of unleaded went from $2.25 to $3.10 within 10 days of Katrina. That probably helped the demand destruction quite a bit. If we get a 38% bump this time (straight to $5), we'd surely have some demand destruction. We'll see if that happens this year, but indications are currently "no".
No is right. Oil and gas are down significantly as a result of Gustav. Go figger. _________________ My new Peak Oil T-Shirt Design
Joined: Apr 05, 2005 Posts: 2574 Location: South of Atlanta
Posted: Tue Sep 02, 2008 10:39 am Post subject: Re: Weekly US Petroleum and NG Supply Reports (Current)
I dont think we see any 'bump" in price like we did with Katrina until there are actual shortages. Not on the radar screen yet.
Dont forget that this is an election year. TPTB are going to do everything they can to stave off any kind of brushfire. I'm guessing extra effort is being applied to this one, especially the movement and managing of gasoline supply.
Let's update our spreadsheet, this should be about where we will be by tomorrow morning or so, unless I have miscounted.
The crude oil situation will be hard to figure out for next week. No deliveries through the LOOP for 3-4-5 days, and the Ship Channel down for a day or two, 90% of the GOM shut down for production for 3-4-5 days, a 250,000 barrel withdrawal from the SPR, plus an extra 7.187 million at least and maybe some more over and above that, reduced crude oil inputs due to refinery downtime.
at 2.4 mbpd refinery capacity shut down, adjusted for the fact that they were only running at 85% anyway, and allowing for about 3 days downtime, we are talking about roughly 7 mb total crude oil input/finished products output lost, so our spreadsheet above is actually pretty close.
While pup55 has a great handle on refinery output, it's going to be nearly impossible to guess as to what the oil/gasoline imports will be in next week's report. Also as of today, 96% of GOM oil output was still shut-in.
Oil traders report that gasoline supplies in the upper Midwest are getting lower, and diesel demand continued to increase. Diesel demand in the farm belt is expected to increase further in the next two weeks as harvest season gets into full swing.
My WAG - for Thursday's report - is that relative to last year, we might see gasoline + distillate products supplied over the last four weeks about equal to last year's level's. _________________ It's already over, now it's just a matter of adjusting.
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