Refining Industry Musings
Oil prices roared to fresh record highs yesterday as the US government reported another fall in heating fuel stocks.
US light, sweet crude rose 96 cents to US$54.60 a barrel, up more than 65 per cent so far this year and a rapid rebound from a brief bout of profit-taking by big-money funds earlier this week. London Brent crude for December rose 55 cents to US$50.60 a barrel.
World prices have surged on fears the US is running out of time to build winter supplies, due in part to the impact of Hurricane Ivan, which damaged oil operations in the Gulf of Mexico last month.
US distillate stocks, including heating oil, fell by 2.5 million barrels to 120.9 million last week, to drop more than 8 per cent below last year, the US Energy Information Administration said yesterday.
US oil production in the Gulf is still running at about 72 per cent of its normal rate of 1.7 million barrels per day (bpd) after pipeline and platform damage by Hurricane Ivan, the US Minerals Management Service said on Wednesday.
Tight stocks in Asia and Europe have magnified the price rise. Japanese kerosene supplies rose 4 per cent in the past week, but remain about 17 per cent below year-ago levels, according to industry data released yesterday.
German consumer stocks of heating oil rose by 3 per cent last month to 60 per cent of capacity on Oct 1, but remained well below levels last year ahead of peak winter demand, sources said yesterday.
Opec president Purnomo Yusgiantoro said yesterday that record-high world oil prices would continue to rise through the end of October because of strong demand. Crude is up 65 per cent this year.
The Organization of Petroleum Exporting Countries members are pumping at just about full capacity to meet rapid demand growth, especially in China and the United States.
posted by Carol in Colorado @ 8:20 AM
2 Comments:
What has just happened with crude oil prices following the hurricanes' impact on Gulf of Mexico production levels illustrates why people in the know worry about dependence on foreign oil. The dependence on foreign crude has always been there, and now there is an increasing dependence on foreign products. This is not good for the United States.
At a presentation made by the head of the California Energy Commission (at the NPRA Q&A in Anaheim on 10/11/04), all of California's increase in future product needs resulting from demand growth were projected to be met by imports. This is scary. The price fluctuations that everyone groans about now are only going to get worse in this scenario.
Tell me again why we shouldn't drill in ANWR? And why we make it difficult to add refining capacity?
Hopefully, the recent trend in good refining margins will continue; maybe then there will be an incentive to add new capacity, other than that which is associated with "creep" (incidental increases associated with projects necessitated by regulations or justified by other means).
The sad thing about this is that once more capacity is added, the "supply and demand" forces accociated with refining capacity will drive margins down again. Hmmm... should we add that capacity or not?
Thanks for the input. I couldn't agree more... especially about drilling in ANWR. See today's blog for an article I found about US independence from foreign oil.....
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