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198 comments on Wednesday Open Thread (and News Dump)

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LevinK on March 29, 2006 - 2:39pm Permalink | Subthread | Parent | Comments top
Maybe this is the underlying explanation why we are at long in oil inventories, but getting tighter on gasoline.

Yesterday oil rose because of the drop of gasoline inventories (by 5 mln.barrels), even though the oil inventories are on the rise again (by 2 mln.barrels).

http://www.bloomberg.com/news/markets/energy.html

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BabyPeanut on March 29, 2006 - 7:44pm Permalink | Subthread | Parent | Comments top
How does that explain anything?
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LevinK on March 29, 2006 - 9:00pm Permalink | Subthread | Parent | Comments top
First, AFAIK more heavy/sour oil is needed to produce a unit of gasoline - hence the oil inventories may need to rise slightly to reflect that.

Second, and more importantly - worldwide there is a shortage of capacity, capable of processing heavy/sour crude. And a lot of refineries are upgrading now. It is possible that a lot of the piled up sour/heavy crude is simply waiting for somebody who is able to process it.

The result of both things is that oil inventories would rise, but there will be shortage on finished products.

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BabyPeanut on March 30, 2006 - 7:07am Permalink | Subthread | Parent | Comments top
Can I make this any simplier?  How about charts from the current This Week In Petroleum

IMPORTS go down:

DEMAND goes up:

STOCKPILES go down:

What more do you need?

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LevinK on March 30, 2006 - 9:39am Permalink | Subthread | Parent | Comments top
You are missing the domestic production variable in the equation. My guess is that it will also be down.

The more important question I was trying to answer is why gasoline production and imports are dropping even though oil stocks are on all times high? The relation between sour/heavy and light sweet crude could be the answer.

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Leanan on March 30, 2006 - 10:03am Permalink | Subthread | Parent | Comments top
Maybe it's just a refinery issue?  It's the time of year when they're switching over to summer blends.  Plus that Amerada Hess refinery was offline last week due to technical difficulties.
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BabyPeanut on March 29, 2006 - 7:48pm Permalink | Subthread | Parent | Comments top
MTBE?  HA!

Assessment needed before restart in Niger Delta -oil

... The companies also are calling for sustainable peace in Nigeria's Niger Delta, where attacks by militant youths have cut the country's oil output by about 641,000 barrels a day, out of a daily output of 2.4 million b/d. ...


Now that's an explanation.
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198 comments on Wednesday Open Thread (and News Dump)

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