re: Oil Price Piece: What’s Really Happening With Gasoline Demand?

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It is therefore questionable how much credit for the 50-day price decline in gasoline the Biden administration could reasonably claim

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100 percent.

They fricked everyone until the point they couldn't afford to drive.

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They fricked everyone until the point they couldn't afford to drive.

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Wait, is this serious...?

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demand for gasoline was lower this July than in July 2020 is not as relevant as the answer to the question of why

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whether it is possible that this year’s driving season could have been worse for gasoline demand than the lockdown summer of 2020.

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It was largely market forces that led to the lower prices. And also to lower consumption that may or may not have been even lower than consumption during the lockdown summer of 2020.

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So let me get this straight, it is largely market forces that are driving prices down now, and not actions by the president. Whereas in 2020, it was actions by the president, namely the "lockdowns" that drove prices down.

And we're supposed to think market forces driving prices (2022) is worse than prices falling due to the president shutting down the economy (2020)?

The price of gasoline collapsed in 2014 when the oil price collapsed. That was before Trump.

The crude oil supply under Obama increased drastically without hinderance due the Obama admin was clueless about what was happening.

Exports happened (other than AK and CA where it has always been legal to export from those states) due a loophole found by Enterprise Products. It happened before the Obama Admin knew what hit them.

The result of the price collapses in 2014 and 2020 bankrupted a lot of oil companies, which were then bought by major companies. The 2020 price collapse is the cause of major refinery closures and the partial conversion of some refineries to make renewable diesel out of used deep fryer oil, along with inedible corn oil extracted after the corn is used to make ethanol. The reason being that their hydrogen reformers were already grandfathered in for CO2 emissions and the hydrogen is used to isomerize the "food oil" into cetane (diesel) which makes more money than ultra low sulfur diesel in California.

Also, most of the "crude oil" from the Permian Basin (W TX and NM) is chemically condensate but congress changed the definition to make it legally crude oil in the same legislation which banned exports except from AK and CA in the mid 1970's. This is the same legislation which allowed the Alaskan Pipeline to be built.

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Before you morons start blaming presidents read the book Rigged: The True Story of an Ivy League Kid Who Changed the World Of Oil, from Wall St to Dubai.

It does a good job of explaining how oil prices work and it has 0 to do with elected officials.

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Then why is this dumbass taking credit for the drop in gas prices? Also, pretty good plan. Do everything in your power to shut down O&G causing prices to rise. Flip flop on those decisions, combine that with less demand because of the high prices you created, then take credit for the reduced gas prices.

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But yes, he shut down the addition to the Keystone Pipeline network.

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That was very important for use of Permian Basin crude to be blended with heavy crude coming down to TX and even LA from Canada. A similar crude oil cocktail recipe is used to turn Eagle Ford (which NO refinery wants as is) into a facsimile of Louisiana Light after blending with a heavy crude from Mars offshore field.

Also, the Saudi funded multi billion expansion at Motiva in Port Arthur of 325,000 BPD was specifically built for heavy crude with original completion schedule to coincide with original completion schedule of Keystone XL from Canada to Nederland, TX. That is the terminal where Motiva has its imported and domestic crude received.

Barrels of what? Root beer, Permian, Canadian, Ecuadorian?

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Barrels of what? Root beer, Permian, Canadian, Ecuadorian?

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Obviously I'm asking about Root beer.

Pipelines carrying oil from various fields, including Canada, flow into the Cushing hub.

So I figured I'd ask (because vast majority of my experience is upstream, only some mid and downstream), since you seem to have downstream knowledge, if there would have been a bottleneck from any increased barrels were the Keystone extension to be allowed to completion and come online, or if there was already enough takeaway capacity downstream from it.

The Keystone went to Cushing with the intent of feeding Phillips in Wood River, IL, but they were able to increase the flow and also ship heavy (20 API gravity) to Borger as well. This was after a heck of a lot of capital investment in both refineries to allow them to handle heavy crude.

There are other pipeline from Canada to Cushing as well, where some is blended with extra light stuff from Texas to be shipped out as intermediate to light crude blends.

FYI, When the pipeline from Cushing to Borger switched to heavy crude, a small refinery owned by a Chesapeake subsidiary which had recently been "overhauled" to zero hours with a reformer installed to make high octane gasoline, was left out in the cold. It had a spur from that same pipeline to feed it with some local trucked in. It was left with only 56 API gravity local crude to refine and capacity dropped by 30% at the same cost to operate. I had a sale for the refinery to Tunisia for a 40 API gravity Libyan crude. Arab Soring in Tunisia had already occurred but what was going on in Libya screwed up the deal in a huge way. Grrrrr that would have made a nice profit for me.

There are other pipelines coming to the Gulf Coast to get heavy crude to refineries (usually the crude unit's main fractionator for the heavy crude line is 347 SS, as are its heat exchanger tubes.

I have no problem with drilling for the light stuff as it adds to the global need as in some place heavy crude needs something to be added to make it flow in pipelines. They used an offspec diesel in Venezuela which we used to ship down there so it could be added near the wellhead to be piped to ship terminals.

Very heavy and heavy crude oil is good for refineries with cokers making petroleum coke. In TX and LA there were 11 refineries actually dependent on imported very heavy crude from Venezuela by sometime in the 1980's. Petocke was a breakeven product to squeeze the last of gasoline out of a barrel. Then in the early 80's its price soared as new markets for it developed, mainly in Europe for lime kilns to make cement. Price back then went from around $10 per ton to several hundred $ per ton. Canada is now the source of our heavy crude, though some still comes from Mexico with declining production.

I appreciate the upstream side and understand now after speaking with a friend who passed away at 90 earlier this year that all he cared about was how much he could get for oil and he was involved as one of those unknown oil men with pieces of fields globally, including the North Sea (his only interest in any offshore production) He even saw the price collapse which was already looming in early 2020, and had positioned himself to be profitable with $27 per barrel oil. Also, he never borrowed money to invest and always played with bigger players to spread risk.