Why haven't gas prices gone down?

BMWTurboDzl said:
My earlier comment was deleted so I'll try again. If ME is unable to sell (As it is now) then the buyer from the ME will start buying from elsewhere pushing up the price.
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I don’t know what you’re talking about because none of your recent comments in this thread have been deleted
 
goingplacesanddoingstuff said:
The Straight of Hormuz closure removes about 8-10mb/d of global supply. That pressures Brent futures up and Brent will hit $80-90 very shortly and probably surge past $120 in the next few weeks.
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Even as the speculators drive up futures, there is also the cost of transport, which has doubled for very large crude carriers (VLCCs). Then add in the elimination of war risk protection by major insurers to the mix and you get skyrocketing costs that the industry won't absorb. We will 😐.
 
SC Maintenance said:
There is no reason for Light sweet shale to go up - yet it is. Its pure speculation. Just like when this Houti's were disrupting shipping a couple years ago, because its momentum trading not supply. You cannot convert a refinery from one blend to another - it takes months or a year.
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You’re missing the arbitrage angle here. Why would a supplier with access to the global market sell to a market with a lower price?
 
goingplacesanddoingstuff said:
You’re missing the arbitrage angle here. Why would a supplier with access to the global market sell to a market with a lower price?
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They will not, if there is a buyer. There are really no buyers for a different type of crude - yet it all goes up. AKA speculation / momentum. US light sweet will go down shortly once the speculators have nowhere to ship there futures contracts at expiry - like when you saw futures go negative at the start of covid.

A refinery in China likely cannot use Bakken light sweet. However another angle is they can actually purchase refined product instead. So for example Canada or Houston could ship there refined product to China instead of crude - and then you would have competition domestically for that supply.
 
SC Maintenance said:
They will not, if there is a buyer. There are really no buyers for a different type of crude - yet it all goes up. AKA speculation / momentum. US light sweet will go down shortly once the speculators have nowhere to ship there futures contracts at expiry - like when you saw futures go negative at the start of covid.

A refinery in China likely cannot use Bakken light sweet. However another angle is they can actually purchase refined product instead. So for example Canada or Houston could ship there refined product to China instead of crude - and then you would have competition domestically for that supply.
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We are already the world's largest exporter of (our) gasoline.

https://www.eia.gov/todayinenergy/detail.php?id=63224
 
SC Maintenance said:
They will not, if there is a buyer. There are really no buyers for a different type of crude - yet it all goes up. AKA speculation / momentum. US light sweet will go down shortly once the speculators have nowhere to ship there futures contracts at expiry - like when you saw futures go negative at the start of covid.

A refinery in China likely cannot use Bakken light sweet. However another angle is they can actually purchase refined product instead. So for example Canada or Houston could ship there refined product to China instead of crude - and then you would have competition domestically for that supply.
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We shall see. I think this somewhat discounts the fact that refineries can blend and downplays the effect of increased demand for African and Brazilian medium sour.

Covid was a demand collapse, this is a supply collapse. I suspect price increases driven via US exports might be higher than you think.
 
goingplacesanddoingstuff said:
We shall see. I think this somewhat discounts the fact that refineries can blend and downplays the effect of increased demand for African and Brazilian medium sour.

Covid was a demand collapse, this is a supply collapse. I suspect price increases driven via US exports might be higher than you think.
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It depends on how long this lasts. When the Houti's shut things down - which was for an extended period, it didn't raise crude prices all that much. There is a global crude glut. The issue is getting it here and there.

However no US administration can survive $100+ Brent as you speculate. If we get anywhere near there you will see US destroyers escorting ships through the straight with an air escort.

I will post this here so we can see it again on Friday. My guess is as usual the retailers will be the primary benefactor.

1772546531398.webp
 
That link is another example of the books being cooked. According to it we export - "enough to fill up the tanks of over 1.5 million SUVs per day, assuming an average tank size of 24 gallons."
Is the average SUV tank size anywhere near 24 gallons?
 
SC Maintenance said:
It depends on how long this lasts. When the Houti's shut things down - which was for an extended period, it didn't raise crude prices all that much. There is a global crude glut. The issue is getting it here and there.

However no US administration can survive $100+ Brent as you speculate. If we get anywhere near there you will see US destroyers escorting ships through the straight with an air escort.

I will post this here so we can see it again on Friday. My guess is as usual the retailers will be the primary benefactor.

View attachment 326764
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Yeah I agree, a lot depends on the timeframe. I suspect it’s going to be several weeks. My guess right now is Brent around $110 in two weeks and WTI around $80-90.

But a lot depends on insurers. If some form of military guarantee makes them comfortable enough to insure Hormuz routes again, then it could relieve pressure.
 
As the price of refined product goes up, refineries of all types of crude can pay more. Why would any crude supplier let it go cheap?
 
SC Maintenance said:
It would be really handy if we had some stash of oil, say like a strategic petroleum reserve, that we could actually use in these situations.
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It would and in the last year, despite promises, it's been restocked by about 2.5% of the total volume. This was something I hoped would actually come to fruition.
 
Mechanician said:
You have to remember it's not "our" oil.
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Exactly, so many have a hard time with this. US oil companies aren't on "our side" when it comes to selling oil and profit, they are on their side. Whoever pays the most get's it. What someone is willing to pay for it depends on their own demand and if they can refine it. The net effect being we export and import a ton of oil despite being the largest oil producer in the world. US oil companies would be dead in the water if they relied entirely on US refineries.
 
PWMDMD said:
Exactly, so many have a hard time with this. US oil companies aren't on "our side" when it comes to selling oil and profit, they are on their side. Whoever pays the most get's it. What someone is willing to pay for it depends on their own demand and if they can refine it. The net effect being we export and import a ton of oil despite being the largest oil producer in the world. US oil companies would be dead in the water if they relied entirely on US refineries.
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Some people are willing to throw all regulations out the window, because of the "our oil" corporate narrative.
It is "our country" they care much less about than their profit.
 
goingplacesanddoingstuff said:
Yeah I agree, a lot depends on the timeframe. I suspect it’s going to be several weeks. My guess right now is Brent around $110 in two weeks and WTI around $80-90.

But a lot depends on insurers. If some form of military guarantee makes them comfortable enough to insure Hormuz routes again, then it could relieve pressure.
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The closed straight thing is over by the weekend.

Otherwise look into buying a EV :ROFLMAO:
 
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