Petroleum Report for Week Ending 5/5/06

[BoeingBoy]

For the week ending 5/5/06....

Domestic crude production averaged 5,128,000 bbls/day

Crude imports averaged 10,007,000 bbls/day

Crude stocks on 5/5/06 were 347,000,000 bbls

Crude inputs to refineries averaged 15,315,000 bbls/day

The world price for crude on 5/5/06 was $55.94/bbl, while the spot price of WTI-Cushing was $70.09/bbl

Refinery capacity averaged 17,333,000 bbls/day, giving a utilization of 90.2% (if you bother to do the math, you'll see that utilization doesn't match the inputs divided by capacity - this is due to the non-crude inputs to the refineries)

Jet fuel production averaged 1,518,000 bbls/day

Jet fuel imports averaged 209,000 bbls/day

Jet fuel stocks on 5/5/06 were 40,900,000 bbls

Jet fuel supplied averaged 1,795,000 bbls/day

From our friends at Platt's, jet fuel prices in regions of the world:

- North America: $2.063/gal
- Europe & CIS: $2.057
- Asia & Oceania: $2.049
- Middle East & Africa: $2.001
- Latin & Central America: $2.057

From our friends at EIA, the U.S. spot prices on 5/5/06:

- NY Harbor: $2.0510
- Gulf Coast: $2.0335
- Los Angeles: $2.1300
- WTI-Cushing: $70.09/bbl

For comparison, Bloomberg reports WTI closed @ $72.13 today (05/10/06)

Last, although not included in the usual chart below, the average jet fuel spot price for May thru 5/9/06 is:

- NY Harbor: $2.1156
- Gulf Coast: $2.0838
- Los Angeles: $2.2214

View attachment 4839

Jim

 

[FWAAA]

Couple weeks ago BoeingBoy included some stats on refinery output that showed that, contrary to popular thought, our domestic refining capacity has grown over the past 15-20 years or so.

During the past week, the former Shell refinery in Bakersfield (that Shell wanted to shutter but was shamed into selling as a going concern) announced that its owner, Flying J (the truckstop operator), is embarking on an ambitious plan to double its gasoline refining capacity within the next two years:

Owner Seeks to Expand Bakersfield Oil Refinery
By Elizabeth Douglass, Times Staff Writer
May 5, 2006

With California fuel prices at record heights, Flying J Inc. has approved plans for a more than $500-million expansion at its Bakersfield refinery that would double the plant's gasoline output as early as mid-2008.

The Ogden, Utah-based company, best known for its 178 truck stops, promised to increase the plant's production when it bought the refinery from Shell Oil Co. last year. Shell had planned to shutter the plant, saying it was inefficient and not profitable enough, but was pressured into selling it instead.

Plant manager Gene Cotten didn't return calls for comment Thursday, but he announced the milestone in internal meetings and an employee newsletter distributed this week.

"The Bakersfield refinery is set to embark on another evolution in the refinery's long history," Cotten said in the newsletter. "The clean fuels project … has been given the final green light."

http://www.latimes.com/business/la-fi-flyi...dlines-business

Wow. Half a billion to expand a relatively small refinery in God-foresaken-Bakersfield. Not an investment that should be made on a whim - or what might be temporary high demand for refined products. But good for them.

 

[BoeingBoy]

FWAAA,

I've read that the cost to build a refinery and the infrastructure to support it/distribute refined product (pipelines in/out, etc) is up to $20,000 per barrel per day of capacity.

Jim

 

[SpinDoc]

Wow. Half a billion to expand a relatively small refinery in God-foresaken-Bakersfield. Not an investment that should be made on a whim - or what might be temporary high demand for refined products. But good for them.

SpinDoc replies:

If a small operator like Flying-J can expand their refining capacity, then there is no logical reason why some of the larger refineries could not also expand their production. This just shows how greedy the large refiners are. Prices will come down in the short term just due to the microscope that the oil companies are under right now, but if they added significant refining capacity, then prices would come down for the long-term which is what is needed to keep prices in a reasonable range for the average consumer and our entire transportation infrastructure.

 

[FWAAA]

SpinDoc replies:

If a small operator like Flying-J can expand their refining capacity, then there is no logical reason why some of the larger refineries could not also expand their production. This just shows how greedy the large refiners are. Prices will come down in the short term just due to the microscope that the oil companies are under right now, but if they added significant refining capacity, then prices would come down for the long-term which is what is needed to keep prices in a reasonable range for the average consumer and our entire transportation infrastructure.

I'm not completely convinced we need much more refining capacity. A few weeks ago, BoeingBoy gave us these stats:

Now for something I'll call the Spin Doc section.....

Domestic Refinery capacity:

Jan 1990 - 15,732,000 bbls/day
Jan 1995 - 15,216,000 bbls/day
Jan 2000 - 16,317,000 bbls/day
Jan 2005 - 16,925,000 bbls/day
4/14/06 - 17,335,000 bbls/day

http://www.usaviation.com/forums/index.php?showtopic=28447

Despite popular opinion that domestic refinery capacity has not been increasing, the facts appear otherwise. The growth shown above is not big in percentage terms, but some of us think we are currently burning too much petrol, and perhaps we should cut back. My ultra-liberal friends (I live in LA, where fellow conservatives are as rare as rainy days) tell me we need to burn less petrol for a variety of reasons, many of which are related to the health of the planet and its inhabitants.

Why should we resist overbuilding refineries? Refining capacity appears to require some HUGE investments, which may or may not ever payoff. More people begin driving Toyota Prius and other hybrids (or just riding the bus/subway instead of always driving) and we might find a glut of refining capacity.

Besides, when oil hits $100 or $150 per barrel, we'll have plenty of excess refining capacity.

 

[N346PS]

Is Flying-J the new SWA. Of the refining & supplier business??? (reducce costs associated with all aspects of the business).

 

[TheWatcher]

I'm not completely convinced we need much more refining capacity. A few weeks ago, BoeingBoy gave us these stats:
http://www.usaviation.com/forums/index.php?showtopic=28447

Despite popular opinion that domestic refinery capacity has not been increasing, the facts appear otherwise. The growth shown above is not big in percentage terms, but some of us think we are currently burning too much petrol, and perhaps we should cut back. My ultra-liberal friends (I live in LA, where fellow conservatives are as rare as rainy days) tell me we need to burn less petrol for a variety of reasons, many of which are related to the health of the planet and its inhabitants.

Why should we resist overbuilding refineries? Refining capacity appears to require some HUGE investments, which may or may not ever payoff. More people begin driving Toyota Prius and other hybrids (or just riding the bus/subway instead of always driving) and we might find a glut of refining capacity.

Besides, when oil hits $100 or $150 per barrel, we'll have plenty of excess refining capacity.

You are on to something. I have said before, theres no conspiracy or black choppers circling to raise oil prices for greedy oil companies. Anyone remember the loud mouth politicians claiming the oil companies are gouging? Most of which are up for re-election or are trying to get elected. They have quietly let that sh*t fall by the wayside, because they all know its garbage. Sad that the American public, blessed to live in a free society with freedom of information, chooses to live blind and not look at the facts.....very sad.