From here http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M
Posted on 03/19/2012 6:44:11 AM PDT by Halfmanhalfamazing
Energy industry analysts say there's no relief in sight at the nation's gas pumps.
While prices jumped 6 percent in February, market experts said many of the nation's refineries have been idled or shut down permanently because their owners claimed they were losing money on them. According to the Wall Street Journal, Sunoco is expected to close another of its large refineries this July, "taking another 335,000 barrels per day in production capacity off the market."
(Excerpt) Read more at boiseweekly.com ...
You are correct. The Obama/Bernanke devalued dollar plays a major part in the rising cost of oil purchases as those purchases are made in the devalued U.S. dollars.
From here http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=A103600001&f=M
More and more, refineries sell gasoline blending products to shipping/storage terminals where they are blended to make the finished motor gasoline. This amount is left out of your graph.
When take together, you get:
The chart you posted shows a maximum of ~1,600 barrels a day. The US uses 18~19 million barrels a day of petroleum. Gasoline consumption is far more than that chart.
Went for a flight with the neighbor & his father who owns a plane. Avgas is almost $6/gal. Good flying weather, hardly any planes in the air.
The retail price of gasoline is not hurting due to lack of refining capacity. There are no gasoline shortages, there is enough active refinery capacity and production.
The retail price of gasoline, just like refiner’s profit margins, are hurting due to the global prices for the crude oil refiners turn into gasoline.
“Build more refineries” is not an answer to a problem unrelated to sufficent supply.
There might be more refineries built, if and when, the prices refiners have to pay for crude oil were to come down, which would make the refinery businesses more profitable, and, depending on circumstances, might help make for lower retail gasoline prices.
Meanwhile, trade-in the pickup (or an old inefficient vehicle) for a more fuel efficient vehicle; strategize around ways you can drive less; get out the old bicycle for “getting around town” (and losing a few pounds); etc. etc. Supply and demand works.
Bookmark
Thank you for the correction.
I see it is down to the 2002 level, but the intermediate peak wasn’t that high.
Use “Dictator Baby-Doc Barak” as you see fit!
But this is old news.
Most of the refineries being shut down are smaller and older facilities that delivered gasoline directly to their local market.
These days it's actually cheaper to refine gasoline at a Texas or Caribbean mega-plant and sail it by tanker to places like Philadelphia.
This article may have discussed USA refineries selling gasoline to European buyers.
Completely true, but the reason is simple.
Europeans are offering more money than USA buyers.
This looks to be a regional supply problem specific to the Northeast. Evidently east coast refineries are being squeezed due to price of input oil.
They can’t get product from the middle of the country and are not set up to process the lower quality crude anyway.
Article-
http://www.foxnews.com/politics/2012/03/17/as-gas-prices-rise-no-relief-in-sight-at-pump/
Potential Impacts of Reductions in Refinery Activity on Northeast Petroleum Product Markets
http://www.eia.gov/analysis/petroleum/nerefining/update/
Release date: February 27, 2012
Executive Summary
This report updates and expands upon a December 2011 U.S. Energy Information Administration (EIA) report, Reductions in Northeast Refining Activity: Potential Implications for Petroleum Product Markets. Since September 2011, two refineries in the Philadelphia area (ConocoPhillips Trainer refinery and Sunoco’s Marcus Hook refinery) and one major Caribbean export refinery supplying the East Coast (HOVENSA’s U.S. Virgin Islands refinery) have closed. In addition, Sunoco has announced plans to idle its remaining Philadelphia-area refinery (Sunoco Philadelphia) in July 2012 if no buyer is found. The three Philadelphia-area refineries (Trainer, Marcus Hook, and Philadelphia) taken together represented 50% of total East Coast refining capacity as of August 2011.
To date, the market transition following the closing of two Philadelphia-area refineries in September and December 2011 has been relatively smooth, but the situation could change. Those closures have been partially offset by the startup of PBF Energy’s Delaware City refinery in October 2011, which had been shut down in late 2009 by Valero before its sale to PBF Energy. However, if Sunoco’s Philadelphia refinery, which alone accounted for nearly a quarter of refinery capacity on the East Coast in 2011, were to shut down in July 2012, petroleum product markets in the Northeast could be significantly impacted.
Refining capacity is available outside of the East Coast to replace products historically supplied by the capacity that has been or may be idled, including potential production losses from the Sunoco Philadelphia refinery, but transportation constraints may hinder the delivery of products to the Northeast in the short term. Ultra-low-sulfur diesel fuel (ULSD) will be the most challenging product to replace as there are few alternative supply sources outside of the U.S. Gulf Coast. Transportation constraints may also hamper the movement of all replacement products through Pennsylvania and into western New York, areas currently supplied by pipelines originating in the Philadelphia area refinery complex. The industry may not be able to overcome all of the logistical challenges in the Northeast for a year or more, as infrastructure changes will be necessary to accommodate the changing product flows.
If the Sunoco Philadelphia refinery closes, price impacts are highly uncertain. If areas cannot be adequately supplied in the short term, prices can spike. In the longer run, higher prices and possibly higher price volatility can result from longer supply chains. The potential loss of the Sunoco Philadelphia refinery presents a complex supply challenge, and no single solution has been identified by industry participants that will address all of the logistical hurdles that must be overcome. The industry will have a financial incentive to serve all markets in the Northeast, and companies are currently investigating options. However, companies are not likely to make significant investments in new logistical arrangements until the status of Sunoco’s Philadelphia refinery is known. EIA will continue to monitor this situation as it evolves.
See complete report
http://www.eia.gov/analysis/petroleum/nerefining/update/pdf/neprodmkts.pdf
The East cost petroleum consumption has dropped 1.5 million barrels a day from the peak a few years ago. They don't need as much capacity.
If they were short, we would see a rise in imports. Instead we see a drop.
In fact, the East coast has been exporting more refined product than before.
I don't see they had any real problem, other than an excess of refining capacity.
If the Sunoco Philadelphia refinery closes, that will probably be a concern. But I suspect someone like PBF Energy will buy them like they did Delaware City. But they might let them close first to get it on the cheap.
Precisely why the oilcos are cutting gasoline production. There is much less demand. If everyone were working, there would be less of a problem with high gas prices. But with 13-15% real unemployment and 20% under-underemployment and 2 MILLION fewer actual jobs in the economy, who needs gas?
While I wasn't looking, it seems 53% of my fellow American voters thought that a jive-ass Chicago Community Organizer of highly dubious provenance, with a slew of commie friends and a string of mysterious Affirmative Action academic credentials, would somehow make a great President. They also thought it would be way cool to have a "person of color" in the White House. Why they didn't choose Deval Patrick is beyond me. He is better looking, just as nonsensically ignorant and ineffectual, and an even better liar.
The RNC also thought it would be way cool to nominate a drooling old fool who made Bob Dole look peppy and smart as "our" candidate.
WTF. Happy Motoring!
If this continues, gas prices will rise so high that Obama will become unelectable.
We are also a net exporter because refiners don’t want to keep dancing to the EPA’s boutique gasoline stupidity and instead refine fuels to the standards of, and for sale into, other markets outside the US.
Which makes more production sense - making a run of 1 million barrels formulated to one standard (for sale outside the US) or 20 lots of 50,000 barrels, each lot being slightly different but which can only be sold in a specific market, and of which each time you change formulas for a specific lot you have to shut down at least partially, thus greatly slowing your production and increasing your cost?
Thank you very much for this info Thack.
Looks like the major fly in the ointment will be with ULSD as NY will be the first to switch over to it this July for heating oil with other Northeast states following suit thereafter.
This all looks like a major supplier reshuffling. Also it appears more pipeline capacity will be needed to get product up here with the refinery closings.
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