Would it be possible for the USA to trade oil & gas futures on what is found here only?

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If that's how any of this works we would have already done this years ago

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We were not in position to do that years ago.

We seem to be now though.

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We were not in position to do that years ago.

We seem to be now though.

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Sure. If you don't know how anything works.

I think our refining capacity is not aligned with our oil resources. We need to import some heavy, sour crude to match our refinery capacity. The lighter crude that results from fracking is not ideal for some significant portion of our refineries.

Seems like a fixable situation, but I don't work in the oil industry, so...

You have NO idea of how the oil markets work. If you decided to decouple from world markets you would have incredibly unstable and unreliable pricing not to mention periodic supply shocks. The futures market operates as a governor on the whole system. You'd have farmers ( and not just them) for example artificially pricing their product higher because of the uncertainty.

You really should rethink your proposal.

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We have a daily shortfall of around 2.5 million barrels per day (bpd) between oil production vs what we consume.

We make up that shortfall mostly with oil from Canada and hopefully more from Venezuela as time goes on


This is not true. We make more oil than we use, however our refineries are not geared to refine that oil, so we import suitable oil and export even more West Texas oil.

Idiotically, we maintain, at great expense, a Strategic Petroleum Reserve. My guess is that we do that because politicians have mastered stealing from the fill and sell contracts. If we really wanted to insure ourselves from worldwide energy shocks - the supposed purpose of the SPR - we would sell all the SPR oil, shut down the SPR, and

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subsidize the retooling of American refineries to handle WTI (or build new

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Refineries that are "alloyed up" (with stainless steel) on the internals of critical equipment can handle sweet crude or heavy sour.

what do you think WTI and the BRENT and WCS are?

west texas intermediate is american , BRENT that's the sissified oil the european's and western canadian select is canadaian and they're many other bench mark crude's as well. all three trade a various premiums and discounts. brent trades at an 8% premium to the WTI which trades at a 23% premium to WCS. here's the thing, they're two markets for oil the physical market for oil (that's real oil, in the pipe line, in reserves, in tankers at sea) that's the oil that's to be delivered and refined. then there's the futures market for oil these are securities tied to the price of multiple bench marks.

typically the futures market is a reflection of the physical market but when the futures market reacts to speculation of oil shortages in the physical market then the physical market reacts.futures drive the physical market rather than reflect it.

that's what happened in 2008 when the futures contract in one bench mark (the WTI) got pushed to $147 a barrel by lehman brothers it crashed and bankrupted lehman. crashing the stock market.

the reason gasoline goes up is because it's priced in it's replacement cost in crude. the gallon of gasoline you buy today will be replace by crude bought in the future.

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Stupid is a choice.....and this would be a stupid choice.

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I guess I am stupid.

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We make more oil than we use, however our refineries are not geared to refine that oil, so we import suitable oil and export even more West Texas oil.

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I thought we were still a net importer of crude oil, while being a net exporter of total petroleum production?

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I thought we were still a net importer of crude oil, while being a net exporter of total petroleum production?

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You are correct. But if you count the crude oil that goes into the refined products we export, then we are a net exporter. The point is that if we could not import a barrel we’d have plenty enough oil if we purposed our refining capacity to US needs.

Our position is even stronger than that, though, because most of the oil we import comes from Mexico and Canada, so strategically speaking (not economically) it might as well be US production because it can’t be choked off by an enemy.