re: Oil & Gas Industry's Workings to Stave Off Diesel Export Ban

ragincajun03 when he sees a doom-and-gloom headline so he gets to make a negative thread about O&G

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But that is a political impossibility, they said, given that reducing the required amount of ethanol in fuel could wreak havoc on core constituencies in Iowa and other Midwestern states whose economies lean heavily on corn

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Ethanol is fricking retarded.

In this case it would be somewhat of a wash. You would maybe end up with cheaper gasoline if there was enough of a surplus. In reality you would reduce the number of bbls on the market at this point.

The USA desperately needs more refining capacity.

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It really doesn't. We can sustain (and exceed) our demand with what we currently have.

Short term, right now, sure that argument can be made. This isn't a lack of US refining problem though.

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We do though. We haven't built one since the late 70s. And while we can "meet" requirements that usually means refineries running near 95% and putting off maintenance.

Or we could build some, pull others out of mothball by using the national defense priorities act and increase our capability, improve our stores and sell more on the global market.

Where exactly is the downside?

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No refiner wants to pay for and maintain spare capacity. They want to utilize their investment. They do not make money running for years at half capacity.

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Except as we have seen it wouldn't go to waste. It would be exported. Also it would allow for fewer maintenance periods to need to be pushed off.

Yes it will cost money. Things worth doing are rarely free

imagine running your vehicle at 96.8% capacity for weeks on end. You would be deferring a lot of maintenance. While your vehicle may easily do 140 mph, running at 135.5 mph certainly has its advantages of getting you where you want to go quickly, it obviously puts a lot of wear on your vehicle. You still want to utilize all your spare capacity?

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We haven't built one since the late 70s.

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But many refineries have undergone major expansions/upgrades.

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China could lower its fuel exports again in October, potentially tightening the global fuel market further, as domestic gasoline and diesel inventories have slumped to multi-year lows.

China’s fuel exports recovered in August as refiners exported 6.01 million tons of petroleum products, up by 12.7% from a year earlier, after Beijing removed in mid-July restrictions on fuel exports that were in place at the peak of the Strait of Hormuz blockage.

The total volume of Chinese fuel exports exceeded pre-war levels last month, with jet fuel exports at an all-time high. Overseas shipments are set to remain strong in September, too.


But October exports could be lower due to the seven-year-low gasoline and diesel inventories in China, GL Consulting, a consultancy owned by MySteel, said this week.

China has not yet announced the fuel export plans for October.

However, with “domestic supply already relatively constrained and internal demand strengthening, refiners are likely to prioritise the domestic market,” GL Consulting said.

“This should reduce refined product exports in the near term, effectively redirecting barrels that would otherwise have been shipped overseas back into the domestic balance.”

Chinese fuel inventories are tight and likely to remain such through the end of October, as demand is being supported by the recent surge in fuel exports and firm domestic fuel demand, according to the analysts.

On the one hand, China’s fuel exports soared in July–September, drawing additional barrels out of the domestic market. On the other hand, peak summer travel supported domestic gasoline demand, while autumn harvesting and pre-season restocking ahead of the traditional September–October peak underpin diesel consumption, GL Consulting noted.

“This is not simply an inventory story: it is a supply-demand balance story, with refinery availability and export flows likely to determine how long the tightness lasts,” the consultancy said.

Reduced fuel exports from China could exacerbate the global fuel crunch created by the constraints in the Middle East and Russia. The tightening fuel markets have pushed refining margins and retail fuel prices to record highs in many markets, including in the United States.

By Charles Kennedy for Oilprice.com

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hina may not be coming to the rescue oilprice.com