Skip to comments.Good Idea for Sunday: Fill up Your Gas Tanks
Posted on 09/15/2019 5:15:11 AM PDT by EyesOfTX
Todays Campaign Update (Because The Campaign Never Ends)
Everyone should go to the gas station and fill your tanks today. Theres no need for panic, but you might save a little money by doing that.
The attack on Saudi Arabian refining and other oilfield infrastructure by Huthi rebels supported by Iran Saturday has forced the Saudi government to shut-in half of its daily crude production. That amounts to about 5.7 million barrels of oil per day (bopd) suddenly disappearing from the global, 100 million bopd market.
Unlike the series of previous Iranian attacks on crude tankers, drones and other facilities that have taken place since April, this one is a big deal. Because none of those previous acts disrupted a significant amount of oil production or movement, crude markets had no measurable reaction to them.
But 5.7 million bopd is a huge quantity of crude, a volume that far out-strips the ability of the few countries with idle capacity to offset. Although the Saudi government attempted to assure markets that it would be able to return to normal production levels by Monday, Reuters quotes a source close to the matter as saying that recovery from Saturdays drone attack will take weeks, not days.
Regardless of which case is accurate, it is likely that oil prices will spike to some degree when Asian markets open for Monday trading late this afternoon simply based on the uncertainty of the situation. How high it will spike is anyones guess, but a supply disruption of this magnitude could lead to something very significant.
Gasoline prices in the U.S. fluctuate with the global price of crude, so any spike in the oil price is going to quickly feed down to higher prices at the pump. Dont complain to me thats just how the market works.
The rhetoric flying following Saturdays attacks is also significantly harsher than what we saw following Irans previous hostile actions. Secretary of State Mike Pompeo issued the following pair of tweets Saturday afternoon:
Secretary Pompeo ✔ @SecPompeo · 16h Tehran is behind nearly 100 attacks on Saudi Arabia while Rouhani and Zarif pretend to engage in diplomacy. Amid all the calls for de-escalation, Iran has now launched an unprecedented attack on the worlds energy supply. There is no evidence the attacks came from Yemen.
Secretary Pompeo ✔ @SecPompeo We call on all nations to publicly and unequivocally condemn Irans attacks. The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression
9,367 2:59 PM - Sep 14, 2019 Twitter Ads info and privacy 5,691 people are talking about this Irans foreign ministry spokesman Abbas Mousavi told Iranian state television that the U.S. accusations were pointless and that his country stands ready to conduct full-fledged war, according to Reuters. Reuters also quotes an Iranian military official as saying, Everybody should know that all American bases and their aircraft carriers in a distance of up to 2,000 kilometers around Iran are within the range of our missiles.
President Donald Trump has rejected counsel from some advisors to mount military retaliations after previous Iranian provocations. After these latest attacks, the President called Crown Prince Mohammed bin Salman Saturday evening to pledge U.S. readiness to cooperate with the Kingdom, by all means conducive to maintain its security and stability.
All of this back-and-forth between the involved countries, combined with the Reuters report serve to increase uncertainty. And if markets hate anything, it is uncertainty.
Again, there is no call for panic here, but the best thing for readers to do when they get up and dressed this morning is to drive over to the nearest gas station and top off the tank. If you wait to do it tomorrow, you might be sadly surprised at the price youll have to pay.
That is all.
We (America) pump more oil than we can use. Prices here should not go up nearly what it does in other places. Half of Saudi is nothing compared to what Russia, the US and other places can do. But no matter the short term displacement, the US is WTI not Brent. And it will be over stocked at all times.
Agreed - and there was another article that said the Saudis expect to resume full production by tomorrow...
Small blip of a few cents/gal for us at most...
Thanks for the pro tip...
I was about to buy a 1500 gallon tank and set clay-mores around it so hoarders can't get to it...
A couple of cents per gallon can mean life or death...
I read all the comments and they are surprising in their lack of understanding. America produces around 10 millions barrels of oil a day and consumes about 29 million.
The fact that we export doesn’t mean we have enough for ourselves, not even close. We operate in a world market, and taking 5% of that production offline is quite a whack.
People also don’t seem to be considering the possibility that these attacks may continue, and the uncertainty about that can add a “fear” premium to prices, which we’ve seen in the past.
The oil futures market was closed when the attack happened, so the price hasn’t reacted yet.
Plus, it’s a futures market, and the future just got uncertain, never a good thing. The possibility of ongoing attacks is an issue.
Iran can’t sell it’s oil right now, and recently threatened the market because the sanctions are hurting them badly.
So, we’ll see how it shakes out.
The problem with hemp is the same as the problem with corn for ethanol. High water use is expensive.
The Saudis claim production will be back to 100 percent by Monday.
Forgot to add, putting millions of acres to work growing hemp lowers the supply of whatever is currently being grown on those acres.
That affects food prices. We don’t have unlimited land or water.
2. There should be not shortage.
3. Will retailers of fuel use this as an excuse to increase fuel costs, probably. So I would not panic, but understand the idea to save a few dollars.
It will be interesting to watch how quickly any panic buying drives up prices.....
Imports form Saudi Arabia are down 25% form the maximum and have been going downhill for a decade:https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mttimussa2&f=m
Conspiracy theory would tell us that the deep state is fighting back.
Thanks for the info. I suspect the same for any plant based fuel. I had just never heard of hemp based fuel before this morning.
I do know the plant was criminalized and demonized shortly thereafter. It didn't fit Lucy's plans for murder and mayhem for mankind.
Here’s the first good news for prices: Kellyanne says Trump will look at releases from the strategic reserve if needed.
This is meant to calm the market, and should help, we’ll see. If the Saudis can get the processing plants up quickly, this was done by Iran. If the Saudis can’t, it may point to a false flag by the Saudis to raise prices just prior to their rollout of Aramco going public, higher prices would help that rollout.
As always with the Middle East, what’s really going on can be cloudy.
Vertical farming will take up the land slack.
Production is down a little because wells have been drilled AND CAPPED waiting for a higher price per barrel. That can come on line very quickly.
But that is by choice now. We’re just being nice.
I heard that we actually export refined fuel. What I heard a few years ago was that we refine more than we can use, but we have to import the raw materials (crude) to do it, but we recently crossed a line in that we now, at least technically, produce all the crude we would need as a country.
Fracking truly changed the world, and it is getting more and more efficient and cost effective every year.
My concerns are:
how long will repairs take,
how simple (and cheap) is this type of attack to pull off,
how easy to ‘copycat’
how expensive will it be to protect oil production from drone attacks in the future - here and there...
If the price of oil is bid up in one part of the world - it’ll be bid up everywhere. I’ll fill my tank...on the off chance answers coming back confirm my fears.
Oops. I may be jumping the gun on that one.
If we could get ten Thorium salt reactors up and running and use that to power more electric cars, we might actually get to where we truly are energy independent as a nation.
If President Trump cured cancer the jerks in the press would NOT cover it... Or they'd write a story about Trump hurting Hospital profits... The press is writing their own obituary.. Writ large in bleeding bias.
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