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17 comments on A Few Charts of the US Crude Oil Supply and Stocks Situation

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Slippery Slope on November 1, 2007 - 2:06am Permalink | Subthread | Parent | Comments top

memmel,
I agree that low refinery utilisation should be a canary in the coal mine with regard to observing the effects of diminished crude oil supplies after the peak. Oil tanker utilisation is obscured by the changeover to double-hulls.

The hypothesis that crude oil production has peaked has the observable consequence of lower crude oil refinery utilisation. High refinery utilization is not consistent with a post peak situation, but low refinery utilisation is by itself not proof that the peak has passed, rather just more consistent evidence.

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memmel on November 1, 2007 - 1:43pm Permalink | Subthread | Parent | Comments top

I'm not saying its proof just that we are living right now in a sort of Indian Summer period where refiners are slashing margins to keep refineries operating or they have to shut them down. Soon we will start to see refineries shutdown if they are not economically positioned to compete at the razor thin margins post peak.

The other situation is demand causes prices to increase and refiners again see large profits for a bit and more oil is imported causing higher crude prices. I really don't think we will see this again simply because America cannot afford another round of bidding and I think we will see some very high gasoline import prices soon. So in my opinion the US has already lost the next bidding war to Europe and Asia.

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Murray on November 7, 2007 - 7:04pm Permalink | Subthread | Parent | Comments top

Memmal, economics is not my strong point, so I'm not sure I follow the "razor thin margins" and "may have to shut down" reasoning. This query is not sarcasm.
thinks
I have crude stock now purchased at $80.00. I think the price will be back to $80.00 in late winter/early spring. I don't want to use my $80.00 stock now, and use $95.00 stock in the spring, when prices are lower. Therefore I will refine as little as possible now. However I have to buy some oil on the cash market to keep operating, at high prices, and the end product prices have not yet gone up proportionately, so my margins are thin.

Is that the logic? Or what?

Seems to me that if I shut down now, end product prices will go through the roof, and the guys who are still refining will have huge margins, so that doesn't work.

Why is everything up and utilization down? Seems like that post Katrina, as well as repairing facilities, considerable capacity may have been added. No? Murray

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17 comments on A Few Charts of the US Crude Oil Supply and Stocks Situation

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