U.S. oil boom divides OPEC

Marketwatch ^ | May 28, 2013, 7:06 a.m. EDT | By Benoit Faucon, Sarah Kent and Hassan Hafidh

[Ernest_at_the_Beach]

I think the goings -on in Syria have caused a big War Premium in crude also.

McCain was in Syria for a few hours yesterday,...and the Euros are lifting the weapons embargo for the rebels....and the a Senate committee has voted funds for the Sunni rebels in Syria.

Russia said OK we are sending more S-300 missiles to Assad.

[Southack]

How high will oil go, Comrade Bubba?!

[thackney]

What oil(forgetting transportation cost to refinery and the danger to life and limb of getting it from its source)is worth the most?

Keep in mind, the transportation cost, and lack of sufficient transportation capacity greatly effects the price of oil at location. The exact same oil today, at different locations can vary in price by over $20. light sweet crude

In general, that is the most desired. But light can become so light that it losses value. In general, something approaching near gasoline tends to be the most valuable. But if it is so light it is mostly butane, it will not bring top dollar.

Is Quaker State, ie Penn St crude oil still the best?

I don't know that was ever true outside of commercials.

US mars - Shell's production from Ursa, Mensa and Mars offshore platforms commingles with Amberkjack pipeline volumes to create MARS BLEND crude in the caverns at Loop. It is a large enough volume to get traded as a commodity. All of these are contract agreements that not only determine quality, but also location of delivery. Adders/discounts to prices tend to be standard for known quality changes and/or different delivery locations. Mars is 30.3° API gravity and 1.91% sulfur delivered to the Loop. (Louisiana Offshore Oil Port)

LLS - Louisiana Light Sweet is 35.6° (lighter than Mars) and 0.37% sulfur (sweeter than Mars) delivered to St James, Louisiana (also gulf coast)

US-WTI is the price you normally hear quoted, when the news generically talks about the price of oil. It is West Texas Intermediate, 39.6° (lighter than LLS) and 0.24% sulfur (slightly sweeter than LLS) delivered to Cushing, OK. This location has become bottle-necked due to the shale oil production, too much coming into one location. It has created a discount in the WTI price even while the demand for it has climbed, because the supply has climbed faster.

http://en.wikipedia.org/wiki/List_of_crude_oil_products

[woodbutcher1963]

So what comes out of the northern Alberta sands?

Also, what comes out of the Balken, ND & MT?

[thackney]

Keep in mind, you can get far different qualities of oil from the same surface location but different fields at different depth below ground. There is no set rule all are the same in an area. The fields are from sediment 10s of millions of years apart. Far different conditions exist in these time periods and produce different oils. Also the “cooking” time tends to be less in shallower fields resulting in heavier oils from nearer time periods.

The oil sands are “young” or more exactly “less thermally mature”, ie less cooking has been done. They technically don’t produce oil but rather Bitumen. Very heavy but also with a lot of BTU’s per barrel. It can be cooked or processed (thermally cracked) to produce lighter more valuable hydrocarbons more suited for transportation fuel. Some of this is done on or near site with an upgrader, producing a synthetic crude, or it is diluted with something like Naptha or Natural Gas Liquids (butane, propane) to get in thin enough to pump to a refinery, where they do the same cracking.

The Bakken shale play produces Light Sweet Crude, 41° (very light without being too light) and 0.2% sulfur (very sweet). Their problem is the pipeline bottlenecks, including to Cushing, OK. Today more of the Bakken oils moves out of state by rail than by pipeline.

[SierraWasp]

It was due to the high parafin content in PA oil, right? That’s what I always heard.

[thackney]

I should have said, the Alberta oil sands produces Athabascan Bitumen. It is 7.7~9.0° API. 10° is water density so this stuff is so heavy it sinks, not floats in water. The sulfur also tends to be high, 4.4~5.4% sulfur.

http://www.etc-cte.ec.gc.ca/databases/Oilproperties/pdf/WEB_Athabasca_Bitumen.pdf

Some locations will have different values but Alberta sands tends to be quite thick and sour.

Over 450 different oils listed at:
http://www.etc-cte.ec.gc.ca/databases/Oilproperties/

[thackney]

So says Wikipedia:

Pennsylvania grade crude oil is thermally stable and has a high viscosity index. It is generally free of asphalt and has only trace amounts of sulfur and nitrogen. It is also high in paraffin and other waxes making it highly desirable for refinement into petroleum lubricants such as motor oil. Its products are also valuable for use in certain hydraulic applications. By-products are commonly found in consumer goods such as cosmetics, and topical ointments.

But since they don’t site sources, I’m not sure this more than gossip, possible just stuff from commercials.

[Orange1998]

$45 to $50 barrel is my guess too. $50 per barrel is not feasible for fracking so this number most likely to settle. Easy to forget avg oil price history is 30 per barrel.

[okie01]

McCain was in Syria for a few hours yesterday,...and the Euros are lifting the weapons embargo for the rebels....and the a Senate committee has voted funds for the Sunni rebels in Syria.

Senator McCain has nevere seen a war that we shouldn't be involved in. Usually, on the wrong side...

[Orange1998]

"Today more of the Bakken oils moves out of state by rail than by pipeline".

Courtesy of Buffet. My guess the TransCanada will be delayed for sometime because of the Buffet/Obama connection.

[ckilmer]

Because the old mighty buck isn’t worth a buck anymore.
..........
Yeah but with rising US oil production—the dollar is rising —which puts downward pressure on oil and gold.

[Milton Miteybad]

Why is oil 95 bucks a bbl then?

Because the currency you're using to buy oil has only 40% of the purchasing power it did in 1981. The price is set on a world market, and exporters increase the per barrel price as necessary to maintain the purchasing power of the emaciated, weak dollars they are taking in exchange for their oil.

[Ozark Tom]

The 95 to 115 range bandied about is not production cost; but, attributed toward needed revenue to dispense thus maintaining political stability.

[familyop]

Thanks. Very interesting.

[1010RD]

Venezuela’s oil minister said on Monday that he would push for a cut in OPEC production...,but then stated, sotto voce, that they'd secretly break the quota limits so as to maximize profits.

[1010RD]

I was at a meeting with some RR execs and a RR car leasing agent. He said tankers were a boom. They couldn’t make enough. Was he exaggerating?

[SunkenCiv]

Thanks Ernest.

[clearcarbon]

"If they were to significantly ramp up production and drive the price of a barrel of oil down to about $40/barrel, the shale development and several other processes would be too expensive to bring oil to market (at least for new ventures). "

The ideal time to top off the Strategic Petroleum Reserve.

I wonder if comrade obama has replaced any of the taxpayer's oil that he extracted from the SPR and then resold to the taxpayers.

[thackney]

I’ve heard they cannot build tanker rail cars fast enough to meet demand.

Tank car boom masks dearth of orders for other rail cars
http://www.progressiverailroading.com/mechanical/article/Tank-car-boom-masks-dearth-of-orders-for-other-rail-cars-8212-analysis-by-Toby-Kolstad—36142

Tank-car orders will jump, but demand for other car types will remain flat or decline in 2013
http://www.progressiverailroading.com/rail_industry_trends/news/Tankcar-orders-will-jump-but-demand-for-other-car-types-will-remain-flat-or-decline-in-2013-Economic-Planning-Associates-says—36000