Oil Prices

Will it make any difference on the supply side, if Obama agree to lift the ban?

Oil CEOs said to press Obama administration to lift export ban

WASHINGTON (March 13): About a dozen US drilling executives, including ConocoPhillips Chief Executive Officer Ryan Lance, were in Washington this week trying to persuade White House officials and lawmakers to lift the 40-year ban on US oil exports, according to two people familiar with the meetings.

Chief executives from the lobbying group Producers for American Crude Oil Exports, or PACE, met with White House senior energy policy adviser Brian Deese on March 11 to ask the Obama administration to roll back a prohibition on most US oil exports imposed after the 1973 Arab oil embargo, according to two people, who asked not to be identified because the discussions weren’t public.

Producers are eager to lift the ban because oil in the US is selling for about US$10 less than the global benchmark. An end to the ban would allow US producers to sell for higher prices.
...
http://www.theedgemarkets.com/sg/article...export-ban

(13-03-2015, 09:56 AM)CityFarmer Wrote: Will it make any difference on the supply side, if Obama agree to lift the ban?
[

CityFarmer san

AFAIK,

1. Retail consumers in US are paying Brent pricing => refineries and other middleman are pocketing the difference.
2. As of last week, US is still importing ~ 7.2 million barrels per day of crude. 7.2 million barrels a day is greater than the aggregate production of Exxon, Shell and BP.
3. One of the problem with LTO (shale oil) is that it is very light > 40 API. That means that premium stuff like distillates (e.g. diesel, kerosene) might be absent. I believe one of the uses of LTO/condensate is as a diluent. So the Americans can send it to the Canadians to dilute the tar sands to be shipped back to the US....


* API = American Petroleum Institute (gravity)

Crude close USD47.05 yesterday. Goldman Sachs President also warn of USD30 oil.

http://www.cnbc.com/id/102496363

Why the U.S. May Run Into an Oil Storage Problem
http://www.bloomberg.com/news/videos/201...in-the-u-s-

(13-03-2015, 09:56 AM)CityFarmer Wrote: Will it make any difference on the supply side, if Obama agree to lift the ban?

Oil CEOs said to press Obama administration to lift export ban

WASHINGTON (March 13): About a dozen US drilling executives, including ConocoPhillips Chief Executive Officer Ryan Lance, were in Washington this week trying to persuade White House officials and lawmakers to lift the 40-year ban on US oil exports, according to two people familiar with the meetings.

Chief executives from the lobbying group Producers for American Crude Oil Exports, or PACE, met with White House senior energy policy adviser Brian Deese on March 11 to ask the Obama administration to roll back a prohibition on most US oil exports imposed after the 1973 Arab oil embargo, according to two people, who asked not to be identified because the discussions weren’t public.

Producers are eager to lift the ban because oil in the US is selling for about US$10 less than the global benchmark. An end to the ban would allow US producers to sell for higher prices.
...
http://www.theedgemarkets.com/sg/article...export-ban

Johor has excess water and exports raw water to Singapore yet have to import processed water from us. LCD TV made in China is cheaper for Singaporeans if we ship it from US Amazon.

Real World is not so mathematically simplistic. Just as Middle East in the past imported refined oil products. 1000-999 is the same as 2-1 so sometimes information is lost in net figures.

Due to process and proximity to ports and other factors, US producers are genuinely keen to export oil. But if I am the US govt, I would rather stock up the strategic reserves slowly because we know in the long run US needs to import oil. It's not a matter of PnL.

(13-03-2015, 12:36 PM)Behappyalways Wrote: Why the U.S. May Run Into an Oil Storage Problem
http://www.bloomberg.com/news/videos/201...in-the-u-s-

Nice!

I've got another article too...

The sky is falling down...erm... I mean the price is falling down.

Analysts Predicting Collapse in Oil Prices Due to Storage Problem
Goldman Sachs President Gary Cohn
Stephen Schork
Dominick Chirichella
Matthew Philips (Bloomberg)
Ed Morse (Citibank)
Jonathan Fahey

(13-03-2015, 11:01 AM)old friend Wrote: Crude close USD47.05 yesterday. Goldman Sachs President also warn of USD30 oil.

http://www.cnbc.com/id/102496363

Now we are talking, oil at 30 baby!!

Yippee! Another analyst with the theory of fewer rigs, higher production + storage space is gonna run out in US of A and it's the IEA, mind you...

IEA's OMR

Extract:

Head Fake

The partial rebound in oil prices that occurred in late January and early February seems to have marked a pause. Prices have since become range-bound, with Brent futures trading around $60/bbl and WTI closer to $50/bbl, and at the time of writing slightly below those levels. On the face of it, the oil price appears to be stabilising. What a precarious balance it is, however.

Behind the façade of stability, the rebalancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly. Steep drops in the US rig count have been a key driver of the price rebound. Yet US supply so far shows precious little sign of slowing down. Quite to the contrary, it continues to defy expectations. Output estimates for 4Q14 North American supply have been revised upwards by a steep 300 kb/d. The projection of 1Q15 supply has also been raised. Plunging US crude throughputs - due to seasonal and unplanned refinery outages, as well as weak margins and high gasoline stock builds in December - have seen US crude inventories soar, compounding the impact of robust supply growth. At last count, total US crude stocks stood at 468 mb, an all-time record.

The unwinding of seasonal refinery maintenance may slow US crude stock builds in 2Q15 but will not stop them, and stocks may soon test storage capacity limits. That would inevitably lead to renewed price weakness, which in turn could trigger the supply cuts that have so far remained elusive. While the US supply response to lower prices might take longer to kick in than expected, it might also prove more abrupt.

P.S. Psst! IEA, have you read the latest NDIC report?

*NDIC = North Dakota Industrial Commission

http://www.cmegroup.com/trading/energy/c...crude.html

Oil close USD45 yesterday. Looks like heading towards USD37 in the next 2 months.

Nymex oil USD44.41 now.

http://www.livecharts.co.uk/MarketCharts/crude.php