Posted on 04/03/2011 2:23:58 PM PDT by thackney
The oil at Bakken is going to Cushing OK which is close to capacity. At the present storage “the LONG” traders will have no place to put the oil. Traders at 90 are going to be in trouble next week. (search on storage levels + cushing)
Hyperion has been trying to build a new refinery in Elk Point, SD.
I forgot to mention, we don’t need to look for unused refinery capacity. We need to reach existing refineries that at least part of their oil is overseas imports and replace that oil.
Most of the oil refined in the US is imported.
From: WTI No Longer Relevant For Crude Pricing?
http://www.oilslick.com/Commentary/?id=2228&type=1
With a working capacity at 40 million and current inventories at 38.3 million that does not leave much for speculators to work with. If there was an accident downstream from Cushing and they had to halt deliveries out of the Cushing inventory they need some surplus capacity for that kind of emergency.
Compounding this problem is the rising flows coming from Canada and the oil from the Bakken taking up refinery capacity and leaving more oil at Cushing. Transcanada Corp just completed a new arm of its Keystone pipeline to connect Cushing to the flow of crude from Alberta. That is going to be 150,000 bpd of new supply headed for Cushing.
Most of the oil refined in the US is imported.
agreed, although that from Canada and Mexico isn’t quite as detrimental as clear across the pond or two.
US oil and gas company Hyperion Energy has said that it has delayed a project to construct a US$10bn greenfield refinery in South Dakota from 2010 to 2011. The 400,000 barrel per day (b/d) Elk Point refinery is planned as part of an integrated project including a power station. If the project goes ahead, Elk Point will be the first refinery built in the United States in 34 years.
http://www.allbusiness.com/energy-utilities/utilities-industry-electric-power/14565771-1.html
We’ve always had plenty of oil even when speculators blow a gasket over some “issue” and run amok. I’d like to see something showing how much we’re driving compared to previous years. My guess is the bottom dropped out of demand for gasoline in this country. This summer looks like it’s going to be a killer for any industry that depends on Americans traveling.
It makes sense. There’s a lot of oil around in general. I just sold my intergrated oil company stock but hanging on to two Pipeline Limited Partnerships. I won’t name them so as not to be a shill.
Probably early on that sale, but you can’t go broke taking profits.
“My guess is the bottom dropped out of demand for gasoline in this country.”
Sorry, don’t have a link handy, but demand is holding up pretty well. Americans adjust, though not always in a smart fashion. Used car prices for 3-5 year-old higher gas mileage autos are up. People have started trading in guzzlers for little sedans.
They blew it on this one last time. Hundreds of dollars in sales tax, a beating on the trade, and then they drive more since they are getting better mileage. And then the price of gas went down quickly. All the used car salesman were driving big SUVs they picked up for next to nothing.
Cushing, OK, a major shipment point for Canadian oil, is struggling to build new storage facilities for the surplus. There is absolutely no reason for oil to be at these prices.
We have cut our driving by 20% this month and are aiming for another 5% now that prices have gone up eight cents per gallon in one week.
The velocity of money is as low as it's ever been...nobody borrowing and very few spending on what they don't actually need right now.
Since the American consumer is not borrowing and spending this deflation is still alive and well.
One day these folks will notice that every commodity has been priced to the point where nobody is willing to buy it and they will find there are surpluses of just about everything worldwide.
And the selling will begin.
The last man holding will find there is nothing behind him but a cold wind.
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