Posted on 02/22/2021 1:20:44 AM PST by SecAmndmt
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Motiva is currently assessing the impacts of Winter Storm Uri after record low temperatures necessitated the shutdown of its Port Arthur Manufacturing Complex on Sunday, February 14," said the company in its Feb. 19 statement.
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(Excerpt) Read more at spglobal.com ...
I am starting to wonder what really went down with the Texas grid last week.
One or more refineries may be down until spring???
I wonder what gas will cost next month
The United States of America, the most free and prosperous country in the world, suddenly can’t run an election or provide dependable electricity and everything discussed is from a perspective of race. What has happened to us?
A bazillion dollars. Just what the liberals wanted.
Every operating unit, shop and building in the facility has a cold weather prep procedure that is executed when temps get low. The length of freezing weather and the extreme low temps took things beyond what they were designed to handle.
A cold startup process is complicated - You don’t just flip a switch and poof it’s running again. This is a big deal. Even in hurricane shutdowns, the power plants in a gulf coast refinery or chemical plant are kept online at a low rate to keep a maintenance level of steam and electricity going to the operating units. This is why these facilities are typically back in substantially full production 8 to 12 hours after the all clear is issued.
In addition, since they are shut down anyway, the refineries may be undertaking some planned maintenance that otherwise would be scheduled later. A less likely factor perhaps in play could be the change over from winter to summer fuel formulations although it seems too early for this.
My opinions...
Thanks for your insight.
Gasoline prices in the region mostly supplied by Texas refineries have not shot past most of the rest of the US, so, I’m guessing low demand is modifying the shock?
https://www.gasbuddy.com/gaspricemap?
“I have worked at several of the refineries mentioned in the report”
Me too. I’m a contractor.
“What has happened to us?”
Our pulpits went silent on social issues.
Our Christian and conservative parents continued sending their children to Bernie factories aka socialist government schools, despite all evidence that children graduating from the Bernie academies were also Bernie voters.
We spent all our national treasure fighting undeclared wars all over the world.
We refused to enforce original intent to the Constitution by our voting patterns.
Time to pay the piper.
The amount of oil in storage is mind boggling. In Europe for example, land storage is completely full and oil tankers are on charter to simply swing at anchor as floating storage. I understand that oil storage at Cushing, OK has started to draw down, which coincides with the D coronation.
Crude oil and refined products in the US generally flow from the gulf coast to the Midwest and East Coast via pipeline, river barge and Jones Act shipping. I imagine that the cold weather and snow stuff disrupted this transportation.
Don't have sources for this aspect so rate it as a SWAG on my part. Sometime in the not too distant future, the stars are aligning for a damn large increase in $$$ for fuels, petrochemicals and steel. The D squeeze on oil & gas production is going cascade through the base industries then hit consumers in the pocketbook from multiple directions. Kaboom.
My opinions...
I did service work in the Chevron plant in Pascagoula, MS. One the cold weather hazards was alligators that would crawl up in the units to stay warm.
My only gator encounter at a refinery was at the bayou that ran alongside it. I had to go to some remote infrastructure stuff that was across the bayou from the refinery. Three of us loaded into a jonboat, crossed and did our work.
Returning to the boat a “log” was length wise against the boat. We realized when we got close that it was a gator pretty near the length of the boat. We started chunking wood at the gator until it swam off then got into the boat.
A friend of mine was doing some work at remote gas pipeline pump stations across the western US. He was hiking a mountain trail in Wyoming and heard a rumble of noise that kept getting louder. He got off the trail and back into the trees. A herd of elk came trotting down the trail.
$5 gas here we come!
Those are great stories, but you should hear a few from folks working in Alaska. I thought grizzly were dangerous (and they are)...but one is far more likely to run into moose. They are not as cuddly as they look.
Interesting article here:
https://www.worldoil.com/news/2021/2/19/saudi-arabia-and-russia-at-odds-before-crucial-opec-meeting
Checking on Gas Buddy, it appears gasoline prices in the Midwest have increased around 50 cents / gal in the last 3 months, with a bit of a spike this last week likely due to the supply disruptions. The spike is at least so far not as bad as I might have thought, however, likely due to the abundant storage you describe...
I assume the effect of decreasing supply (Saudi and allies) is to drive up prices at least as much as supply goes down, and in the effort also drive competitors with higher production costs (but perhaps less government "appetite" for the money) out of the market. Neglecting the fact that competition always returns, meaning that all the Saudis accomplish is to buy some time, we have also other OPEC producers squawking because they say this strategy decreases their overall oil revenues. From that I take it that the higher prices the other producers also sell for do NOT cover their lost quantity of sales.
So, is Saudi then counting on their low production cost to improve their relative position, and fill the revenue gap at home with their currency reserve, hoping to then capitalize during high demand price surges to refill their currency reserves? I must be wrong, because this strategy seems untenable in the long run.
Start with the comfortable assumption that Saudi Arabia is the big dog in OPEC. So big in fact, that the tail cannot wag the dog. Outside of OPEC, the next tier of producers are the US, Russia and the North Sea countries of Great Britain and Norway. Going down one more tier you get Indonesia, Nigeria, Mexico, etc.
About the only thing I assume about SA is that they will act in their own interests. For the most part, I think their interests are to have a stable west, keep Iran screwed up and to minimize Russian influences.
So, how SA addresses their interests is manipulating the price of oil by opening and closing their spigot. The general goal is to maximize their profit margin while not killing the golden goose of western economies. Desperate or overly stressed countries can destabilize the status quo and do unpredictable things that are not good for SA’s business of selling oil.
Prez DJT removed SA’s economic sword over the US, which enabled the US to be the trustworthy broker that increased stability in ways SA viewed as a positive while increasing stress on crazy Iran and constraining Russia.
That's about as far as I can make sense of this stuff.
My opinions....
Thanks. That all seems to make sense, probably because it closely parallels my take / my best guesses. Heheh. Except...
(also rather simplified)
If the Saudis need $80+ / barrel oil (in 2020 dollars) to run their country & maintain the monarchy, unless US production very severely stumbles*, in the long run the difference has to be made up first from their currency reserves and then eventually through debt.
*With our current idiots in charge, a stumble of a lot more than energy production may well happen in the US, but I also expect much more trouble for Saudi from Iran and Russia, unimpeded by the US. So, I suspect the Saudis’ overall situation may be even worse in coming years despite higher energy prices. “More pain than gain”, so to speak.
In the long run, I really don’t know how much debt Saudi Arabia can sustain without a societal collapse, or, at least, a collapse of the monarchy. (Same thing?) That especially if Iran is resurgent. They certainly do not seem to have a flexible, adaptable economy. That leaves me wondering if the monarchy is just kicking the can down the road, hampering their enemies, and hoping the inevitable does not occur in their lifetimes. Possibly they hope the Asian economies will return to rapid and sustained growth, creating demand to drive prices and volume to levels that will sustain them. But, that’s just my guess.
Well spoken.....
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