Oil Falls to 19-Month Low on Saudi Rejection of More OPEC Cuts (almost in the $40/barrel range)

Bloomberg | January 16th, 2007 | Mark Shenk

[headstamp]

"There's plenty of heavy, sour crude available in the world, but refineries, particularly those in the U.S., have to undergo costly retooling to handle it."

I thought our refineries down south were set up to handle the heavy crap that we get from Hugozuela? (Venezuela)

[cinives]

why should the feds stick their noses in ? Do you think you have a right to cheap gas ?

We like to think we're free marketers in this country, and you're talking about socialism.

[SauronOfMordor]

Saudi and Iran are heading for a showdown over Iraq's Sunni/Shiite conflict. The Saudis figure they can survive a sharp drop in oil price longer than Iran can

[taxed2death]

....makes about as much sense as anything else I've read here.

I'm not fond of the Saudis.... but I like Iran a lot less.

[Ben Mugged]

Most of the Venezuelan crude oil used in the United States is heavy, sour quality crude oil. The largest number of refineries in the United States can process light, sweet crude oils, while only the small fraction of refineries that have extensive desulfurization and bottoms-conversion units can use heavy, high sulfur crude oils such as that produced in Venezuela. Refineries that normally run intermediate sour crude oil could run a small quantity of heavy sour crude if they could blend it with light sweet crude oil, but if light sweet crude oil is in short supply, then that option is not available. When a heavy sour production source is disrupted, refiners can run a lighter mix of crude oils. In 2002 we had 11 refineries capable of handling Venezuelan oil. In addition the lead time to get middle east oil to US ports is about 4 weeks so recent price decreases do not show up for oil already in the tankers.

[SierraWasp]

Well shoot, D.G... I thought they were like giant police criusers... there as a potential show of force, to keep the peace. Isn't the last thing we want is for them to actually have to make war, or even a minor skirmish?

Yes! Of course we're bluffing, but everybody knows what could happen if anybody tried to call our bluf, don'tcha think?

[Dog Gone]

Yep, and I'm not sure we're really bluffing. We're sending the Stennis carrier there and it will arrive within a month.

The only conceivable country we're placing ourselves in position to attack with two carrier groups is Iran.

Oil might get really expensive this summer.

[Cedar]

Since you know the industry....have you heard anything about oil prospects for the Joint Development Zone (JDZ) acreage between the Democratic Republic of São Tomé & Principe and the Federal Republic of Nigeria?

Chevron has drilled in block 1, and some of the other blocks might get drilled this year by other block operators.

Any news you know or have heard on that JDZ area?

[PAR35]

Because that gas was refined with $70/bbl oil. We won't feel this for a month or more.

We sure don't have to wait a month for the increases when oil prices are going up.

[RetiredArmy]

Because that gas was refined with $70/bbl oil. We won't feel this for a month or more.

Funny how they jack it up each day as it keeps rising. Why doesn't it come down just as quickly?

[mysterio]

Because money is being made on both ends. Because you have to buy gas. Because gas is more or less a monopoly, and monopolies can do what they want.

Wait until an alternative catches on. All kinds of things will change when there's good old fashioned competition present in the fuel market.

[GregoryFul]

If you are in Pennsylvania, perhaps you missed Governor Slimes (D) increase in the gasoline tax - who would notice?

[nascarnation]

I'm assuming a lot of these rural midwest ethanol distilleries are coming on line. Anything that ups supply at the margin has to help pricing. Now the economics of ethanol subsidy is a whole nother deal........

[headstamp]

Thanks for the info.