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Gasoline Supply Concerns Trump Crude SPR Rumors
While most eyes are firmly focused on the crude oil markets for indications of QEternity spillover, geopolitical escalation, and/or SPR rumors; the end-product market has gone only one way for the last two weeks. Thanks to technical supply constraint concerns (refinery maintenance in the Atlantic Basin and supplies at their lowest in over four years) RBOB gasoline prices have jumped over 18% in the last few days as crude has drifted - which can only mean down-the-supply-chain price rises at the pump for car-drivers everywhere (whether you can find the gas station using your new iPhone 5 or not).
...clearly someone got squeezed...
Chart: Bloomberg
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Thar she blows.
Look at the spreads in RSI and...well everything. Wow.
dump into the close?
Any discussion of refinery capacity should at least mention the early August fires at the Chevron refinery in Richmond, CA and the HollyFrontier refinery in Tulsa, OK. Reduced supply over and above any routine scheduled maintenance.
I haven't seen these mentioned anywhere in discussions of gasoline prices.
here i was thniking that my bloomberg app on my BB went nutso,
"WTF? GAS up 6% today, lol"
nov. delivery is 291.09 up 1.37 cents. some ahole got his nuts squeezed trying to close out too late in the game. Open interest on oct only 5,265 contracts at close. nov. 115,000+
Also, if I am not mistaken, general US consumption of gas is quite down (i.e. unemployed people don't drive to work), a subject covered here in the past. Further, another subject covered here was refinery closings (not shut downs) in the North East US. I believe the refinery was in New Jersey, was quite old, needed a lot of updates, and just wasn't profitable. IIRC, that would have been about 20% of the refining capacity of New England. The article discussed the logistics of getting replacement fuels from other refineries, which were much farther away.
I also think the US exports more gas now too.
So, this is probably just the dynamics of the market as things tighten up a little bit.
Regards,
Cooter
P.S. OilPrice had some coverage of the NE refinery closings (which were DOE mandated LOL)
http://oilprice.com/Energy/Crude-Oil/US-East-Coast-Faces-Severe-Oil-Shortages-and-High-Prices-as-Refineries-Close.html
"dump into the close?"
Appears to be a flash smash. I saw it on CNBC earlier and thought it was a misprint. Gas looked up 19 cents. Now only a cent. Fat finger? Or was someone tanking down buck pitchers this afternoon?
Change in the front month contract. nov. is front month now up 1.39 cents. oct was front month when it was up 19 cents.
Again to restate my original suggestion,
Eventually someone is going to eventually just flash smash the market and not just flash crash it.
Someone got drunk and stopped messing around with the foreplay and just jammed it in.
Sometimes I am amazed at how the media and even ZH, (ZH usually does not get baited, in reality), will buy in to a brainwashing by the powers to be. Do we really have peak oil. I think not. I never bought it, never will. It just amazes me that now even Boone Pickens says we have drilled our way out of the oil import problem. Yes, we have some refinery problems. Part of the plan, that's why the oil companies spun off most of those businesses. And they all seem to be making bigs bucks by their stock prices. So why do we have high gas prices. I say it is nothing short of fraud. Afterall, the Big Banks, (Deutche Bank, JP Morgan, Goldman Sachs. Barclays, and even the Kock Brothers), bought oil by the tanker fulls. They have sat on most of it. They want top dollar. They determine what price they sell it to the refineries who process it and add their small margin on it and we buy it after.
You can't have it both ways unless it is all rigged. You can't have a global recession. No growth. A U.S. contraction too, slow or no growth and tell me that oil demand is soaring. So pick your thesis. But they both don't work together. We are either expanding or contracting. Oil should reflect that reality.
Last but not really my last thought. It could have nothing to do with the elections, could it? LOL on that one. I won't even express my opinion on that can of worms.
Bottom line, somebody is ripping us off on gas prices. With the prices of most other commodities, Sugar, Cocoa, Cotton, Coffee, Industrial Metals, and meats falling for over a year. I bet the Kock Brothers are doing the most damage as well as some private hedge funds too. So bend over while they smile on their yachts. They have actually figured out how to get you to fill their yachts and buy them too. Have a Great Day All.
The US no longer drives global oil demand...
I strongly suggest you read the following article and peruse the comments on this artcle that came out this week:
http://www.theoildrum.com/node/9495
Pay very close attention to graph titled "Western Hemisphere Exports"....
It is down 17% since 2005....
A bit further down is a chart of world discoveries and producition... We have been extracted more oil than we are finding for nigh on 30 years....
None of that cover's what Peak Oil is as a theory.
Peak Oil is just common sense. The point at issue is "when" the peak occurs.
Oil takes millions of years to form. We are using up the whole lot of it in ~200 years. It seems pretty straight forward to realize that the accumulation rate and burn rate are off by more than a few orders of magnitude, therefore oil will run out at some point.
Given that we are consuming oil at an exponetntial rate, I will leave it to you to figure out exactly how that story ends.
Regards,
Cooter
You can not consume something at an exponential rate. The Rate of Change may increase, but it's certainly not exponential.
You are an idiot.
Ever see the consumption of sugar by yeast in a wine must?
How is that not "exponential"?
Duh.
None of that cover's what Peak Oil is as a theory.
And pray tell, what would be the conclusion that one would draw from analysing the data presented therein?
The only "theory" in Peak Oil is how the modern industrialized world will deal with it...
Went to the site and found it kind of amusing how the site starts. "The Oil DRUM" and it seems to be a rebutle of somebody else's work who believes there are ways to get more. I think that oil is a plenty. Maybe, not enough as we consumed in the past. But the surge in demand of 2002 to 2010 does not seem to me to be equal to a time in the near future. What ever you may believe. I like to think of it like this. During those years America used every flying object we have for a war. Helicopters, tanks, and air-craft carriers which use a huge amount of fuel. It takes many gallons of fuel to push a carrier around. I have a small 21' jet boat with a 460 ford in it. I could blow 50 gallons of fuel of real quick. Think about what it takes to run those twin chop helicpters and push those aircraft carriers. The military used every piece of equipment we had during the above period. Our military probably used more fuel per day than the U.S. did in cars alone. Yes, I agree that it may be costlier in the future to pull the oil from the gound and oceans. But, I also believe the U.S. is sitting on many unexplored fields of oil. Look at what Petrobras found. May be larger than anything the Saudis have. I kind of think the U.S. loved the Saudi oil because it was so easy to pull and the labor was cheap. If their people only knew. On the other side. Higher prices always brings on new thinking. Like liquid gas. Kind of wierd how I saw these cars during the 70's. And it took higher prices to bring out the concept again. I think the oil companies shutter at the thought of it. Do you know that with synthetic oil one can run a propane gas car for 30,000 miles before having to change the oil because it is cleaner burning. It may even be longer. So there are methods to lower usuage and get more at the same time. I am a "all of the above" about energy. I don't think that U.S. citiznes have a appetite for a war like the past 10 years because of cost alone. The whole thing was on a charge card financed by the Chineese Credit Bond department. Now the Bernankee has to buy it because China wants the bill paid. The real shocker for me was when America did not even have enough helicopters here to save the people during Katrina. That was the day I woke up. They acutally were putting dismantled helicopters together to run as lifelines. Amazing. Hence, I still do not believe in peak oil. l believe price will demand other methods and technology to accomplish what is needed for transportation. Hence, less demand and more production.
The stock market seems to agree. All the Oil Service stocks are belly up. Seems the market senses less demand too. Check out GDP, HAL, BHI, WFT and CRR which may soon look like GMXR. So maybe the market is smarter than both of us are.
a lot of "I think's" and "I believes" does not equal evidence
Think of the ride to work you have in the morning and again at night. All those pesky cars- traffic!
Think that is happening on every freeway in your city, in every city, in every state, all across the country, everyday as it has for decades. Now the rest of the world is joining in.
How could we POSSIBLY run out?
It is not so simple. It is more simple. It is 1.2 billion chinks on motor scooters. It is the exponential gain of the human locust plague. You cannot overcome it.
US crude demand has been stagnant since '08 and it shows, Brent/world demand has held premium. The shift to global demand has taken the trading world off the WTI standard, begrudgingly. Take any countries reserves and divide by world consumption and you get anywhere from a few months to a few years.
Fprtunatley we have a kick ass military (and by 'we' I mean US) on the leashe of very short sighted corporate interests. They will do what it takes to keep the oil flowing and affordable to the masses, until demand ultimately suffocates the artificial discount provided at the barrel of a gun. Then it is all over. The highest bid will price out the chinks on the scooters first. Then the SUV soccer momes, then transports. Then ultimately everyone but the government and the military.They will have enough to last forever.
You will be on a bike, yelling at passrsby..."Peak oil was a lie!"
I would point out that when fuel prices really take off, it will be the most inefficient users who will cut consumption and not the other way around. Consider three fuel consumers:
High fuel prices will be absorbed by those who recieve the most value from its consumption. Entire cities in the US are built on low fuel prices and they will be the first to buckle under as prices continue to climb.
Regards,
Cooter
I discussed this very issue w/ the wife 2 yrs ago.
"Suppose we enter a crunch for gas, nat gas, food, etc.. how will the idiots in charge respond? Certainly we will be provided an ""allotment""" and, IF it is based on PREVIOUS use we are HURTING ourselves by conserviing NOW!"
My plan?
Prepare for the worst but not noticeably.
A big word, "IF".
Does that mean all those yachts will have to be beached and rented as homes. The Saudis and Dubai are not going to like that.
If you are going to troll, at least do it well...
What's up with that. Don't you believe Dubai and the Saudis have bigger and better yachts then America.
I guess you don't believe they built a paradise of connected islands made out of white ocean sand.
I guess you don't believe they have snow skiing while it's near 100 degrees outside.
I guess you don't believe that they actually have gold bathtubs and toilets. All our money goes somewhere.
The sheeple believe the pounding of the oil drum. I don't. The price has more to do with our dollar than actual demand.
That correlation is as real as the price of gold. Maybe, I express what I say in a unusual way.
But I do speak what I think. Not how I am told to think. I surely am not one of the brainwashed sheeple.
Netinyeahoo gave a New, New estimate of when Iran would have nuke power for a bomb at Spring 2013...zzzzzzz
The price of oil should now plummet as the F E A R of war in the Gulf is postponed for the winter. And those plant shut downs, how many months does it take to reopen. I'm smelling BS. And the refinery fire, is that not fixed? Didn't Brazil or someone have a huge fire and they said it would take two eeks to fix. It's hard to get good help I guess.
Love it, Nitinyeahoo, what a piece of shit. He can't leave us soon enough to rid the world of his garbage.
Take him and the hard liners in Iran, lock them up in a room and throw the keys away. Nobody would even notice.
Peak-oil theory makes oil perfect for speculators!! And for the whole boom-bust circle.
I keep it simple.
Due to peek-oil theory and geological tension prices are much hire than you expect on supply and demand.
In such a situation we all know producers are willing to produce more than there is demand.
For this reason a lot oil is stored, adding to the supply site of the equation.
High price make demand go down more.
A bust is inevitable. Unless a part of the production capacity is destroyed. In such a situation a clean war with Iran is for the Saudi's an economical necessity.
So thanks to speculation price and production went up and demand went down.
This is results in a bubble.
This process happens always in a marked that is considered tight. The real existence of peak-oil is irrelevant.
You can find on the internet that different producers failed to sell their oil loads for en Ocktober
For the US there is nothing to win with a war with Iran and it will also be very destructive for the US. I think Romney voters want him to finish the job Bush started “Bankrupting the USA” on behave of the Saudi and Israeli masters.
A lot of bluster and weasel words...
Wheres the Beef?
Outside of the softs (SB,CC,KC) everything you said was a lie to support your erroneous claim. SI,HG.GC, HO,RB,CL,) are up from last OCT. Your religion is backrupt.
I don't have to care. I drive a Volt. 1,897 miles so far using 1.4 gallons of gas. Junk away my friends. I love passing gas (stations)
As one of the team of folks who developed the volt, I find it very interesting to hear from those who purchased and drive them.
Just know that despite all of the "you'll never recover the cost of the vehicle in gas you'll save" nonsense you will hear from posters, you are driving the absolute best that our current technology can offer at this time.
Decoupling. Nice. Should be all tidied up about 3 weeks ahead of the election.
Shit guys, doesn't anyone recognize a short squeeze when they see one??? Good grief.
funny...I don't feel wealthier when I have to dish out $4 per gallon. In fact...quite the contrary.
I guess the "wealth effect" was meant for someone other then myself.
At least you have a friend at the Bank of Canada who is on a bond buying binge to prevent the $Can from escalating and having you pay $8 per gallon given that the US imports 2.5 mil brls/day from Canada which is more than Saud and Mexico’s exports to the US combined.
What you talking aboot foo?
Look, over there! A beaver!
This:
http://www.eia.gov/pub/oil_gas/petroleum/data_publications/company_level...
and this:
http://ca.reuters.com/article/domesticNews/idCABRE88O0WO20120925
and you thought it was to help the manufacturing sector? Foo!
The people on this board are highly knowledgeable and as far as I’m concerned, they know exactly what I have just said to be true and what a rising Canadian dollar would do to gas prices at the US pumps.
Young foo!, Only now at the end do you understand.
Your feeble skills are no match for the power’z of the dark side.
You will pay the “pump” price for your lack of vision.
http://www.youtube.com/watch?v=tRVXPXetgMo
Long bikes.
Kona bikes feel "collapse-worthy"....
long long bikes
Long shoes... long clown shoes.
Should "lift" consumer spending for September and October right?
All net positive for average joe!
It's the expiring contract but 50 cents in a week or so is nuts!
Someone having some real fun end of quarter.
20 cents in a day is just I got drunk and went fat finger incredible.
"Zees eez zah price staahbeeleetee."
The WSJ (others) reported a fat finger was the cause of this the last time this happened about a week ago
‘Fat-Finger’ Error Caused Oil-Stock Price Swings
Spike in Energy Stocks Tied to Fat Finger, Questions Remain about Commodity Related Flash Event
Fat Fingers and the Price of Oil
"I'll take Energy for 600, Alex."
"Here's the answer: This was the last time refinery capacity was expanded in the U.S."
<buzzes in>
"What is 'before Return of the Jedi premiered in theaters'?"
"Correct, go again..."
Funny, because that is right about where the labor force participation rate is too. 1980 levels. Wait what? wages matter?
and that 600 will buy you....A tank of gas!!!!! weeeeee!!!!!! wealth effect!!!
Do you simply make shit up?
Here is a chart of US refining capacity going back to 1985
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MOCLEUS2&f=M
So, unless you have somethng substantive to add aside from complete utter bullshit, kindly STFU and leave the discussion to those that have a clue about the issue...
Interesting chart, thanks.
Heh, I think he meant the last time the US actually permitted the construction of a new refinery, rather than the expansion of an existing refinery.
But, then again, that isn't what he said!
Regards,
Cooter
"Here's the answer: This was the last time refinery capacity was expanded in the U.S." "What is 'before Return of the Jedi premiered in theaters'?" "Correct, go again..."
When the US refiners are exporting 28% of REFINED gasoline offshore, I do not see a problemm, except they are making a killing, while we get killed at da pumps!.
If I am not mistaken, refiners have the worst margins of the entire oil business. While they may occasionally have windfalls due to dislocations in the market, this is not the norm at all.
To suggest they are making a killing at the expense of the consumer is stupid. Go do some homework and come back to post, constructively and with sources, the average margin for refiners in the US. For a bonus, look at the historical data and let me know if margins were better or worse when exports were less (or zero).
Regards,
Cooter
The margins depend on the price of the feedstock. Once it is refined, it trades at world prices... Any refiner that sells for less, i.e. a local discount, is not a very good businessman... Sorta like Mittens saying that anyone overpaying his taxes is not qualified to become POTUS...
$5 gas by Feb 2013
Right. And price controls on fuel before 2015. Count on it.
-- Paul D. Bain
PaulBain@POBox.com
Short Bus " Valet Parking" at the malls this "Holiday Season!"
Looks like it only affected the October contract. Is gasoline normally in backwardation?
We'll be out of gas by sometime in 2014 it looks like
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WGFSTUS1&f=W
Time to watch Mad Max Road Warrior again to remind me what world will be like soon. lol
You can watch that if you want to lift your mood.
Going the other way you can always watch "The Road."
pods
Don't forget "On the Beach" as another good option...
Which Mel Gibson future hell vision: Peak Oil or Peak Zion?
Oilopocalypto???
Price of gas in my area is plummeting. At least that is what MSM is reporting.
Now when someone says, "hey buddy can you spare a nickel?", i can. Can't spare a dime yet.
This is "Big Oil" casting its vote for Mittens.
The first telvision debate is next week, I think. Perfect timing. Price at the pump should be well over $4.00 by then.
OVER$4? Are you kidding me? In Cali. it's pushing $5, all ready!
Strange thing. Some lonely places in the Rockys do offer the fuel somehow cheaper. Must be an issue, gas gets cheaper the further/higher it needs to be transported...
Less oxygen requires more " catalyst". I Understand your sarcasm though!
You mean blowing up refiner oil hedges with government interventions has cost that gets passed on to consumers? Shocking. Who could have predicted that?
Alex Jones said some of the stupidest shit I have ever heard him say today. He said we have some unlimited amount of oil/gas/and coal under us. Jones fails to realize how hard it is to get and what the EROEI is, which is the most important part.
Also have fun tapping the Rockies! Have fun destroying the fresh water supply so we can have a few more years to drive around in circles!
At least he made a point showing that prices are absolutely not driven by demand.
His point was that prices aren't driven by demand? Did he discuss how US oil production peaked in the 70's? Did he discuss how world production flatlined last decade?
No he didn't. He did not give the other half of the equation - supply. He gave the mundane arguement that there is plenty of resources out there, but with a twist that they aren't letting us at them. This is moronic at best because it takes energy to get the product, and we are going deeper into the ground.
Good luck getting to them Mr Jones.
Someone over at TFMetals had an interesting comment about Jones. Basically they said he went off the deep end regarding peak oil (the true elephant in the room) whilst generally being informative on police state and other issues. They then suggested he was a disinformation agent (i.e. enough truth to draw a crowd, but always with the intent to deceive on major issues).
I never watched much A Jones, I just don't like the tone of his reporting as I am much more suited to ZH style information dissemination.
Regards,
Cooter
john jimi, they actually do have fun causing destruction. They're just assholes.
Don't forget about nat gas futures shooting up as well. Earlier in the year all we heard was record summer heat driving demand for nat gas, that never really materialized. Now the meida is all over the start of the winter season driving demand.
The speculators will always claim increased demand in the future to drive the price up now. If the demand never materializes, well roll that contract over until there is news that demand will spike again. Perfect excuse to drive the price even higher.
is anything not fully manipulated? I like to check into the EIA.gov charts now and again. I like this chart the most, there are lots of external influences. but........so supply in constrated...possibly because we are refining so much less gasoline. down 26%, 7%, 9% and 10% the past four years.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M
Last trading day for October RB contract.
Gas is now, in fact, more expensive than steak and beans !
Coming soon, to your 90inch "Flat Screen" ) Ramen and Candles!
Wake up People!
I got six 12 packs of Ramen noodles in the cubbard. ;-)
My "candle" is a lumen-adjustable LED flashlight that tail stands. ;-0
Contract expiration day for Oct. delivery. Nov. contract is at 2.90ish. Somebody got caught in a squeeze big time, bless their little greedy assholes.
East coast gas supplies also being affected by St. John N.B refinery explosion this week.... 300,000 bpd offline...
The "union 76" station I pass on daily basis, went from 3.95 to 3.86 today...
I think these CRIMINALS are trying to fool me!...
But, I know better!...MY MAIN MAN, has taught me well!!
I think this is actually a really big deal....
fuk it all
just stay long TSO
Good summary of the US NG import/export situation:
http://www.eia.gov/naturalgas/importsexports/annual/pdf/import_export201...