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26 comments on Playing detective with Saudi production numbers

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Petropest on December 16, 2005 - 11:21am Permalink | Subthread | Comments top
When OPEC speaks of "refinery bottlenecks" could this be translated to mean "heavy &/or sour crude oil refinery bottlenecks"? It may be that these grades are the only spare capacity they have left. It seems that Valero is making moolah refining heavy/sour crude with help from relaxed regs: http://www.washtimes.com/business/20050313-114327-7447r.htm

I wonder if they will sell "winter gas" year round now? Doesn't refining sour crude produce extra sulphur emissions at the plant or out the tailpipe? Doesn't refining heavy crudes have a lower EROEI and higher greenhouse gas emissions per gallon of gasoline? When the oil companies borrow from the SPR do they get to repay what they borrow with heavier/sourer crude? If so, this is a sweet deal for them.

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jkissing on December 16, 2005 - 12:18pm Permalink | Subthread | Parent | Comments top
I think there is a real bottleneck of up to 1mb/d. Evidence is that oil in storage has been rising for months. K/R did not affect this because production and refinery went down and is coming back in almost perfect alignment. OTOH, Saudi might be happy to produce less for a variety of reasons, and kuwait too. My guess is that these two will cut back in Jan, at least until Iran's reactors are bombed, then once more looking like the good guys as they return to full production.
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peakearl on December 16, 2005 - 4:00pm Permalink | Subthread | Parent | Comments top
I have followed your comments about refinery bottlenecks for some time. I'm sure refining is very tight, but my thought is that if we had a real refinery bottleneck, we should be seeing significant problems in refinery products, which is not the case from what I can see. Certainly we have more heavy crude than we can refine, be it seems we still have sufficient capacity for now even without that.
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jkissing on December 16, 2005 - 9:46pm Permalink | Subthread | Parent | Comments top
US commercial crude stocks are, and have been for some time, including throughout the K/R period, 10% above the five-year avg. Gasoline and distillate stocks are, and have been, below the avg in spite of massive product imports. K/R did not affect this relationship because refinery outages quite neatly matched gom crude production outages, and both have pretty much come back on line together. It seems to me that if there were more refineries crude stocks would be lower, product stocks higher, along with higher crude prices (sliding ever since K/R) and lower product prices (generally higher since K/R.)
Consider that world product consumption is higher over the past several months, during which crude prices have slid, providing a logical explanation why some OPEC members think production should be cut.
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26 comments on Playing detective with Saudi production numbers

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