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Author Topic: Refineries Will Be Big Winners When Price Gaps Widen Back to Topics
DoctorV

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Detroit

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

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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CivicMA
Champion Author Boston

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Message Posted: Feb 11, 2013 12:21:01 AM

And how will this effect prices we pay for gas and heating oil??
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remay
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Message Posted: Feb 10, 2013 11:28:11 PM

WILL be???
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lesndave
Champion Author Texas

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Message Posted: Feb 10, 2013 11:06:38 PM

We shall see, won't we??
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mastermariner
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Message Posted: Feb 10, 2013 9:08:21 PM

good
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Sneakers55
Champion Author Houston

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Message Posted: Feb 10, 2013 1:57:47 PM

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.
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nsdp
Champion Author San Antonio

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Message Posted: Feb 10, 2013 1:09:56 PM

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.
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FPLREP
Champion Author Virginia

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Message Posted: Feb 10, 2013 8:16:11 AM

All the articles I read say there is no profit in refineries? Have we been lied to?
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dr047
Champion Author Cleveland

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Message Posted: Feb 10, 2013 7:07:58 AM


Everyone involved is a winner except the drivers.
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heydano67
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Message Posted: Feb 10, 2013 4:55:32 AM

we'll see
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hokieburgh
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Message Posted: Feb 10, 2013 4:24:49 AM

the dynamics of this story will be fascinating to watch unfold
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MINIWINI598
Champion Author Washington

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Message Posted: Feb 10, 2013 3:05:28 AM

Figures...
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Jayburt
Champion Author Toledo

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Message Posted: Feb 10, 2013 1:01:59 AM

They always are
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jwalkerh
Champion Author Louisiana

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Message Posted: Feb 10, 2013 12:54:39 AM

They are always big winners...
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nsdp
Champion Author San Antonio

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Message Posted: Feb 9, 2013 8:46:29 PM

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]
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crep1291
Champion Author Ottawa

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Message Posted: Feb 9, 2013 7:55:39 PM

Refineries always win even if the gap doesn't widen. There isn't enough competition, so they charge what they want.
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BurntOrange
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Message Posted: Feb 9, 2013 5:06:52 PM

Speculator tips. Great.
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brbts
Champion Author Charlotte

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Message Posted: Feb 9, 2013 4:04:05 PM

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.
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csblesson
Champion Author Texas

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Message Posted: Feb 9, 2013 3:46:11 PM

Old news
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ErnieK9LO
Champion Author North Dakota

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Message Posted: Feb 9, 2013 3:37:02 PM

Build the refineries in ND and we do not have to worry about this.
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txequitygas
Champion Author Houston

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Message Posted: Feb 9, 2013 2:55:38 PM

Figures...
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Mystikal1
Veteran Author Akron

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Message Posted: Feb 9, 2013 2:46:35 PM

Refiners are already big winners along with the oil traitors. They'll just make more money.
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pricewar
Champion Author Ogden

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Message Posted: Feb 9, 2013 2:18:06 PM

A lot of players here, each one has it own agenda to make money. This is a reason for differences
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gizbo123
Champion Author Los Angeles

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Message Posted: Feb 9, 2013 1:53:32 PM

Oh boy now let's start building refineries that we are lacking that big gov stopped "allowing" us to build.
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OHMS
Champion Author Orange County

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Message Posted: Feb 9, 2013 1:51:56 PM

widen more than they are now?
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evowner
Champion Author Salem

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Message Posted: Feb 9, 2013 1:23:51 PM

Refining cost are necessary. Competitive bidding should be maintained to give a fair price to the consumer.
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skinsfan125
Champion Author Virginia

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Message Posted: Feb 9, 2013 1:13:52 PM

no matter who wins we loose.
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mastermariner
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Message Posted: Feb 9, 2013 1:12:26 PM

Good if you are a share holder
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Rappcommuter
All-Star Author Virginia

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Message Posted: Feb 9, 2013 1:08:49 PM

What this boils down to is that gas won't be any cheaper.
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lcleveland
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Message Posted: Feb 9, 2013 12:54:17 PM

ok
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Taxrefugee
Champion Author Arizona

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Message Posted: Feb 9, 2013 12:48:49 PM

A very complex operation with lots of unanticipated and unintended consequences.
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pleinyeux
Champion Author Montreal

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Message Posted: Feb 9, 2013 12:47:07 PM

Interesting ..... When they are not a big winners
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humblepie
Champion Author Toledo

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Message Posted: Feb 9, 2013 12:45:09 PM

sadly not at the pump i bet
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SSwathwood
All-Star Author Denver

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Message Posted: Feb 9, 2013 12:37:36 PM

When are they not big winners?
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CocoPaz
Champion Author Santa Barbara

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Message Posted: Feb 9, 2013 12:32:59 PM

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.
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RAJNY
All-Star Author New York

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Message Posted: Feb 9, 2013 12:31:59 PM

agree
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fuel2use
Champion Author Seattle

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Message Posted: Feb 9, 2013 12:21:57 PM

Interesting.
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