No place to put all the oil in N. America

Discussion in 'Commodity Futures' started by silk, May 31, 2007.

  1. silk


    May 31 (Bloomberg) -- Royal Dutch Shell Plc, Europe's largest oil company, and Vitol Group, a Rotterdam-based trader, are among companies to hire supertankers to store up to 20 million barrels crude in the Gulf of Mexico because onshore storage is nearly full.

    Shell hired the Atlantic Prosperity and the Front Scilla for up to 60 days' storage, while Vitol hired the carriers Irene SL and Patris for 45 to 60 days, according to Oslo-based PF Bassoe A/S and other brokers. Oil companies may have hired at least ten tankers for storage, Nikos Varvaropoulos of Optima Shipbrokers in Athens said in an e-mailed note.

    ``There's no point in trying to deliver crude now given the current level of stocks in the main refining centers of the Gulf Coast and mid-continent,'' Harry Tchilinguirian, an analyst at BNP Paribas SA, said in an e-mailed note today.
  2. kinda old news and a main reason that cracks have blown out so far. The only thing holding crude up is the refiners fucking with output by creating "events" just about every day AND holding back capacity. Latest crap is colonial pipeline shutting in a major section for a couple of days, Funny how June unleaded expired today. Had this piupeline not announced this shut-in, unleaded was going to take it in the A$$ today for expiry. It was down over .08 this am before the news hit the mainstream media.

    So more games now. Instead of lightening purchases, they are going to store additional quantities offshore now to hide the bearish supply situation.

    The whole energy complex is a house of cards this summer. It won't be long before we will all be reading of the next huge fund implosion in the WSJ.
  3. clacy


    It would be nice if they would build some additional refineries. Do they think that demand is going go do down or even remain stable?
  4. silk


    There are plenty of refineries. Never once have I gone to gas station and there not be any gasoline. There is 20 days of supply of gasoline versus last years 21 days. Its all a scam. There is no refinery shortage. Problem is that its a monopoly product with price being set on open market. The monopoly controls the price and isn't going to dump on itself. Traders then left to speculate on the price.

    If your electric bill and water bill was set on open market, they would be double/tripple also. South Florida has TRUE water shortage, but they don't raise the price.
  5. clacy


    Good points. I guess the bottom line is that until the price impacts demand, they will charge as much as they can for it. Obviously oil companies function just like all companies. They will make as much as they can until competition and/or demand force them to lower their magins.
  6. Another day, another refinery snag!! Can you believe this shit??? Lyondell houston reporting cuts in gasoline processing.

    if we start to fall later, another event will happen to turn it around.
  7. Maybe they are just anticipating an interruption to crude supply.

    somewhere like The Straits of Hormuz.
  8. jaburns82


    Where do you get your Energy info from? I'm primarily a technical trader, but would like some fundamental filters. It would appear you're in the know. Thanks in advance for the response... and sorry if this is thread jacking.:)
  9. moo


    Why is the current level of stocks so high?
    Because the carry is so high. August is about a dollar above July, and September about a dollar above August. I guess it costs less than dollar a month to store a barrel of crude.

    Why is the carry so high?
    Because there are too many speculators long oil and gasoline.
  10. Gotta be careful about what you read, and how you interpret it. Seems to be a decent amount of misinformation around.

    Here's a link to an article at Reuters regarding the Lyondell situation. The title is "Lyondell Says Houston Refinery Operations Normal".

    The article:

    "HOUSTON, June 1 (Reuters) - Lyondell Chemical Co. (LYO.N: Quote, Profile, Research said on Friday that operations at its 270,000 barrel per day (bpd) Houston refinery have been normal all week after a temporary reduction in throughput on a gasoline producing fluidic catalytic cracking unit on Monday.

    "Operations are normal at the refinery," said Lyondell spokesman David Harpole. "Operations have been normal all week."

    Harpole said a notice filed with the Texas Commission on Environmental Quality on Thursday about the Monday throughput reduction was "a routine filing."

    A riser on the FCC malfunctioned, triggering the feed reduction, and the matter was resolved that day, Harpole said."

    My opinion was that both BP and Chevron had more significant news today regarding their refineries.

    That said, my opinion would be that todays move had little to do with refinery news, and more to do with hurricane speculation. Just an opinion. Today, the National Hurricane Center upgraded a tropical disturbance in southern Gulf of Mexico to Tropical Storm Barry, which was forecast to hit northern Florida and the Carolinas this weekend.

    There are alot of factors that affect the market. These refinery announcements are made everyday, and if the announcement is not outright false, it is made days late and perhaps inaccurately. I get a summary of this type of announcement a couple of times daily from Smith Barney. What I find is that if the market is going up, a bullish refinery announcement helps the market out, even if it is a week late in being announced. LOL. If it's bearish, and timely, it doesn't affect the market.

    I think there are much bigger factors at play, like weather patterns, overall economic patterns, supply and demand statistics, possible geopolical concerns, inflation expectations, etc etc. Refinery actions are way down the list.

    #10     Jun 2, 2007