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Crude Passes $100
Remember that October "deflation" that was driven by energy prices dropping (as reported 5 mintues ago)? You can forget it. As of seconds ago, WTI just passed $100 for the first time since July 26. This is another $200 billion in GDP that was just taken out. The market forecast now is global meltdowny with chance of QE3: 85/95%. And in fundamental news, Enbridge and Enterprise announced they would reverse the direction of crude oil flow from Cushing to the US Gulf. Hardly bearish for WTI prices and will likely lead to an even faster compression between Brent and WTI.
From the Enbridge press release:
Enbridge Inc. ("Enbridge") (ENB)(ENB) and Enterprise Products Partners L.P. ("Enterprise") (EPD) today announced that they have agreed to reverse the direction of crude oil flows on the Seaway pipeline to enable it to transport oil from Cushing, Oklahoma to the U.S. Gulf Coast. Pending regulatory approval, the line could operate in reversed service with an initial capacity of 150,000 barrels per day by second quarter 2012.
"The Seaway Pipeline reversal provides an early opportunity to offer Gulf Coast access to midcontinent producers and other crude oil shippers," said Patrick D. Daniel, President and Chief Executive Officer, Enbridge Inc. "A Seaway reversal will provide capacity to move secure, reliable supply to Texas Gulf Coast refineries, offsetting supplies of imported crude."
Michael A. Creel, President and Chief Executive Officer of Enterprise's general partner, said, "We congratulate Enbridge on its agreement to purchase a 50 per cent interest in Seaway. We believe that reversing the direction of crude oil movement on Seaway and the construction of additional infrastructure will accelerate access to Gulf Coast markets, reduce transportation costs, improve both producer and refiner economics and hasten the development of North America's crude oil reserves."
Following pump station additions and modifications, anticipated to be completed by early 2013, the capacity of the reversed Seaway Pipeline will be up to 400,000 barrels per day in mixed service. Enbridge and Enterprise expect that the reversed Seaway pipeline will be fully contracted. The partners anticipate conducting an open season to validate shipper support for an expansion of Seaway, through looping or twinning.
After reversing the direction that crude oil flows on the 500-mile (805-kilometer), 30-inch diameter, long-haul pipeline, Seaway will deliver crude from Cushing into the Houston-area market by utilizing existing affiliate and third-party pipelines as well as its Texas City local pipeline system. Enbridge and Enterprise plan to build a 45-mile (72-kilometer) pipeline that will link Seaway directly to Enterprise's ECHO crude oil storage terminal located southeast of Houston. This will provide shippers with enhanced connectivity and more efficient transportation to the Houston refining market. Additional investment required by the joint venture partners to reverse the line and construct supporting lateral and related facilities is expected to be approximately $300 million.
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$100 plus crude pisses me off. Responding thereto, I bought myself a 2010 Corolla which gets excellent gas mileage.
Was it built in Japan? If so, you might have gotten one that glows in the dark. Cool. Seriously, get it checked out for radiation.
We have a gaurdian angel. Somewhere out there in the .1%, someone is using his/her own money to bid up the price of oil and scare the shit out of Bernanke and the ECB. Basically screaming at them "do not print, you will destroy your domectic economies with stagflation". We are safe.
Hmm, what it is that happened to the market soon after July 26?
I don't know if anyone noticed, but there was a glut at Cushing. They just announced they directed it to the Gulf to move it quick. Sometimes it really is easy as Supply and Demand fundamentals, rare, I know.
Any one notice this?
From the EIA weekly report
Combined with the drop last week of 15.3 million barrels, we are down 100 million barrels over past year (admittedly from high levels)....
Looks like all that cheap oil that was bought in the past couple of years is being run down and signals, perhaps, that we our living off inventories because the big boys (the ones that take delivery) don't want to bid the prices up even further....
they can only keep that game up for so long
Take a gander at this
http://omrpublic.iea.org/stockresults.asp?formcountry=Total+OECD&formproduct+=%25&formformat=Time+Series+10+Years&Submit=Submit
Select OECD Total and "Days forward"....
Saying crude "passed" $100 is an understatement. It's up $3 today and is moving in a parabolic fashion toward almost $102 and still climbing!
It must be that tremendous demand required to fuel that white hot economy!
Just in time for Holiday Shopping.
Hmmm, Gifts or Heating Oil?
Ever notice that every time there are no cards left to drive the dollar down, oil trades up???
how can they do qe3 now? if the fed want to make qe3 count, they have to make it big, when i say big me think the big T at least... 100us WTI do not price that big, i think it s something else (war..peak oil...) nevertheless it means qe3 too dangerous to do now, will be out of control...