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Author	Topic: Refineries Will Be Big Winners When Price Gaps Widen	Post a Reply Back to Topics

DoctorV Champion Author Detroit Posts:1,130 Points:226,110 Joined:Aug 2008	Message Posted: Feb 9, 2013 12:07:07 PM Ignore DoctorV Report Abuse The Street thinks oil price differentials stem from a lack of pipelines. That's only partly true, says Keith Schaefer, editor of Oil & Gas Investments Bulletin, arguing that limited refinery capacity is just as big a challenge. Schaefer expects most investors to be caught completely off guard when the Brent/WTI gap widens and light oil prices plummet later this year... ...The Street is expecting a narrower spread, but I have the opposite view for a pretty straightforward reason. It starts with light oil. The amount of light oil being produced in the U.S. due to the shale revolution is going to completely overwhelm the refineries as early as July. Over the last 25 years, oil refineries in the U.S. have been moving away from light oil to heavy oil. But more recently, light shale oil has... Visit Seeking Alpha for full article

DoctorV

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Detroit

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Message Posted: Feb 9, 2013 12:07:07 PM

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The Street thinks oil price differentials stem from a lack of pipelines. That's only partly true, says Keith Schaefer, editor of Oil & Gas Investments Bulletin, arguing that limited refinery capacity is just as big a challenge. Schaefer expects most investors to be caught completely off guard when the Brent/WTI gap widens and light oil prices plummet later this year...

...The Street is expecting a narrower spread, but I have the opposite view for a pretty straightforward reason. It starts with light oil. The amount of light oil being produced in the U.S. due to the shale revolution is going to completely overwhelm the refineries as early as July. Over the last 25 years, oil refineries in the U.S. have been moving away from light oil to heavy oil.

But more recently, light shale oil has...
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REPLIES (newest first)Ignore Short Messages

CivicMA Champion Author Boston Posts:2,036 Points:562,215 Joined:Jun 2011	Message Posted: Feb 11, 2013 12:21:01 AM Ignore CivicMA Report Abuse And how will this effect prices we pay for gas and heating oil??
remay Champion Author Houston Posts:7,078 Points:2,143,215 Joined:May 2006	Message Posted: Feb 10, 2013 11:28:11 PM Ignore remay Report Abuse WILL be???
lesndave Champion Author Texas Posts:3,173 Points:727,880 Joined:May 2011	Message Posted: Feb 10, 2013 11:06:38 PM Ignore lesndave Report Abuse We shall see, won't we??
mastermariner Champion Author Texas Posts:4,820 Points:520,450 Joined:Jun 2011	Message Posted: Feb 10, 2013 9:08:21 PM Ignore mastermariner Report Abuse good
Sneakers55 Champion Author Houston Posts:51,849 Points:2,168,625 Joined:Nov 2005	Message Posted: Feb 10, 2013 1:57:47 PM Ignore Sneakers55 Report Abuse On Feb 9, 2013 12:23:51 PM, evowner wrote: >Refining cost are necessary. Competitive bidding should be maintained >to give a fair price to the consumer. Refining is where the profit usually isn't. After all, the price of their input is about two-thirds of the cost of the end product.
nsdp Champion Author San Antonio Posts:1,117 Points:47,990 Joined:Jun 2012	Message Posted: Feb 10, 2013 1:09:56 PM Ignore nsdp Report Abuse No you remember the quarters and years where the crack spread is nearly 0. Other times like 4Q 2012 Valero made $12/barrel on crack spread. Go get a stock chart for the last 10 years on Valero and you can see when times are good and when they are bad.
FPLREP Champion Author Virginia Posts:8,397 Points:2,475,725 Joined:Oct 2005	Message Posted: Feb 10, 2013 8:16:11 AM Ignore FPLREP Report Abuse All the articles I read say there is no profit in refineries? Have we been lied to?
dr047 Champion Author Cleveland Posts:2,726 Points:542,445 Joined:Aug 2010	Message Posted: Feb 10, 2013 7:07:58 AM Ignore dr047 Report Abuse Everyone involved is a winner except the drivers.
heydano67 Champion Author California Posts:1,806 Points:385,235 Joined:Feb 2012	Message Posted: Feb 10, 2013 4:55:32 AM Ignore heydano67 Report Abuse we'll see
hokieburgh Champion Author Virginia Posts:1,226 Points:491,455 Joined:Feb 2007	Message Posted: Feb 10, 2013 4:24:49 AM Ignore hokieburgh Report Abuse the dynamics of this story will be fascinating to watch unfold
MINIWINI598 Champion Author Washington Posts:3,170 Points:546,400 Joined:Dec 2011	Message Posted: Feb 10, 2013 3:05:28 AM Ignore MINIWINI598 Report Abuse Figures...
Jayburt All-Star Author Toledo Posts:598 Points:143,175 Joined:Jun 2009	Message Posted: Feb 10, 2013 1:01:59 AM Ignore Jayburt Report Abuse They always are
jwalkerh Champion Author Louisiana Posts:6,197 Points:1,377,430 Joined:Oct 2008	Message Posted: Feb 10, 2013 12:54:39 AM Ignore jwalkerh Report Abuse They are always big winners...
nsdp Champion Author San Antonio Posts:1,117 Points:47,990 Joined:Jun 2012	Message Posted: Feb 9, 2013 8:46:29 PM Ignore nsdp Report Abuse Building refineries isn't going to help when Mexico is contracting 1million barrels per day and PDVSA is contracting another 1million barrels per day of refining capacity that would otherwise be idle due to lack of US demand. Big refiners like Valero, where I retired, take excess capacity off line by shutting down units in their refineries. This is a partial shutdown of the refinery not a total shut down until things get really bad like in St,Croix or Aruba. No one seems able to understand but the King of Saudi Arabia is the only decision maker in the world on the price of oil. As long as he is happy there will be no adjustments. The Dammam Oil Field is an example. Saudis shut that field which produces 2.5 million barrels per day in 1985 and have never restarted it. ARAMCO can take another 8.5 million barrels per day off line with a phone call. There is no one else with the market power tot drastically change prices. [Edited by: nsdp at 2/9/2013 8:47:24 PM EST]
crep1291 Champion Author Ottawa Posts:2,637 Points:486,190 Joined:Dec 2010	Message Posted: Feb 9, 2013 7:55:39 PM Ignore crep1291 Report Abuse Refineries always win even if the gap doesn't widen. There isn't enough competition, so they charge what they want.
BurntOrange Champion Author Austin Posts:8,877 Points:1,609,740 Joined:Nov 2007	Message Posted: Feb 9, 2013 5:06:52 PM Ignore BurntOrange Report Abuse Speculator tips. Great.
brbts Champion Author Charlotte Posts:3,747 Points:796,265 Joined:Feb 2011	Message Posted: Feb 9, 2013 4:04:05 PM Ignore brbts Report Abuse Need to build more efficient refineries where the OIL is so we don't need to worry about pipelines and such so we can all save and lower OUR gas prices.
csblesson Champion Author Texas Posts:1,926 Points:378,725 Joined:May 2012	Message Posted: Feb 9, 2013 3:46:11 PM Ignore csblesson Report Abuse Old news
ErnieK9LO Champion Author North Dakota Posts:2,811 Points:568,530 Joined:Nov 2010	Message Posted: Feb 9, 2013 3:37:02 PM Ignore ErnieK9LO Report Abuse Build the refineries in ND and we do not have to worry about this.
txequitygas All-Star Author Houston Posts:932 Points:183,060 Joined:Dec 2012	Message Posted: Feb 9, 2013 2:55:38 PM Ignore txequitygas Report Abuse Figures...
Mystikal1 Sophomore Author Akron Posts:233 Points:627,335 Joined:May 2011	Message Posted: Feb 9, 2013 2:46:35 PM Ignore Mystikal1 Report Abuse Refiners are already big winners along with the oil traitors. They'll just make more money.
pricewar Champion Author Ogden Posts:2,075 Points:302,490 Joined:Jul 2012	Message Posted: Feb 9, 2013 2:18:06 PM Ignore pricewar Report Abuse A lot of players here, each one has it own agenda to make money. This is a reason for differences
gizbo123 Champion Author Los Angeles Posts:1,596 Points:1,777,650 Joined:Dec 2005	Message Posted: Feb 9, 2013 1:53:32 PM Ignore gizbo123 Report Abuse Oh boy now let's start building refineries that we are lacking that big gov stopped "allowing" us to build.
OHMS Champion Author Orange County Posts:13,866 Points:1,718,545 Joined:May 2005	Message Posted: Feb 9, 2013 1:51:56 PM Ignore OHMS Report Abuse widen more than they are now?
evowner Champion Author Salem Posts:2,318 Points:385,985 Joined:May 2012	Message Posted: Feb 9, 2013 1:23:51 PM Ignore evowner Report Abuse Refining cost are necessary. Competitive bidding should be maintained to give a fair price to the consumer.
skinsfan125 Champion Author Virginia Posts:1,604 Points:304,050 Joined:Jul 2010	Message Posted: Feb 9, 2013 1:13:52 PM Ignore skinsfan125 Report Abuse no matter who wins we loose.
mastermariner Champion Author Texas Posts:4,820 Points:520,450 Joined:Jun 2011	Message Posted: Feb 9, 2013 1:12:26 PM Ignore mastermariner Report Abuse Good if you are a share holder
Rappcommuter All-Star Author Virginia Posts:519 Points:574,870 Joined:Apr 2011	Message Posted: Feb 9, 2013 1:08:49 PM Ignore Rappcommuter Report Abuse What this boils down to is that gas won't be any cheaper.
lcleveland Champion Author San Antonio Posts:2,756 Points:676,005 Joined:May 2011	Message Posted: Feb 9, 2013 12:54:17 PM Ignore lcleveland Report Abuse ok
Taxrefugee Champion Author Arizona Posts:1,535 Points:413,495 Joined:Jan 2012	Message Posted: Feb 9, 2013 12:48:49 PM Ignore Taxrefugee Report Abuse A very complex operation with lots of unanticipated and unintended consequences.
pleinyeux All-Star Author Montreal Posts:918 Points:227,105 Joined:Oct 2012	Message Posted: Feb 9, 2013 12:47:07 PM Ignore pleinyeux Report Abuse Interesting ..... When they are not a big winners
humblepie Champion Author Toledo Posts:35,313 Points:2,399,070 Joined:Mar 2006	Message Posted: Feb 9, 2013 12:45:09 PM Ignore humblepie Report Abuse sadly not at the pump i bet
SSwathwood All-Star Author Denver Posts:549 Points:800,295 Joined:Nov 2009	Message Posted: Feb 9, 2013 12:37:36 PM Ignore SSwathwood Report Abuse When are they not big winners?
CocoPaz Champion Author Santa Barbara Posts:2,512 Points:349,895 Joined:Jun 2012	Message Posted: Feb 9, 2013 12:32:59 PM Ignore CocoPaz Report Abuse When are they "small" winners? We are praying for the family members and friends of the victims of the cop killer in S Calif. May he turn himself in or be peacefully arrested soon. Unfortunately, I'm afraid that neither will happen.
RAJNY All-Star Author New York Posts:575 Points:455,020 Joined:Oct 2011	Message Posted: Feb 9, 2013 12:31:59 PM Ignore RAJNY Report Abuse agree
fuel2use Champion Author Seattle Posts:3,609 Points:757,945 Joined:Dec 2010	Message Posted: Feb 9, 2013 12:21:57 PM Ignore fuel2use Report Abuse Interesting.