Energy Demand And Supply

Discussion in 'Energy & Fuel' started by Harry Havens, Jun 28, 2017.

  1. Harry Havens

    Harry Havens Well-Known Member
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    The International Energy Agency (IEA) has released their May 2017 (PDF) report to the general public.

    It seems to be particularly optimistic about consumption growth in the 4th quarter of this year and even forecasts a level above the 100Mbpd day for part of 2018. Those levels would outstrip current supply estimates, which would lead to higher prices.

    Of course higher prices would accelerate supply, especially in U.S. Shale and likely OPEC nations wishing to address budget revenue issues. Likely to provide limited impact to the overall picture, imo.

    The other major factor is China. China has recently announced some deceleration of growth via reduction of refining capacity of nearly 200Kbpd. Then there is the 800lb. gorilla sometimes referred to as China's SPR (Strategic Petroleum Reserve) which may now be larger than the U.S. SPR. No one outside of China's officialdom knows for sure its size, nor do we know how soon China will top out its SPR.

    It does seem likely China will use its SPR to increase political influence among OPEC members.

    The Weekly U.S. report from the Energy Information Administration (EIA) starts to roll out at 10AM EDT.
     
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  2. Harry Havens

    Harry Havens Well-Known Member
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    The EIA weekly report came out yesterday and here is the link... https://www.eia.gov/petroleum/weekly/

    Oddly the small drop in gasoline inventories is blamed for gasoline prices rising yesterday. Considering that those inventories did slip and refinery output slipped as well... that would seem reasonable. Yet demand slipped a bit more than supply as seen in the day's supply numbers which increased overall.

    The gasoline prices seem to be moving in lock step with Crude prices, as both have risen 5.6% over the past week. So the issue would be why are crude prices rising. One factor would be the almight dollar, but that can only account for 1.7% increase. The other 3.9% increase is hard to fathom unless too much weight is being given to drop in U.S. Crude Production of 100Kbpd since previous weekly report. Or possibly excessive enthusiasm regarding OPEC's latest "agreement", or even unease of Qatar.
     
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  3. Harry Havens

    Harry Havens Well-Known Member
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  4. Harry Havens

    Harry Havens Well-Known Member
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  5. Harry Havens

    Harry Havens Well-Known Member
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    A chart derived from the EIA Weekly report...
    upload_2017-6-29_22-34-16.png
     
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  6. Harry Havens

    Harry Havens Well-Known Member
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    An article on the Natural Gas glut in the U.S. This is the real reason that Coal is being used less in the U.S.
    In China and India NG is much more expensive and competitive with Coal. That may change in a few years as more LNG carriers are built.
     
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  7. Harry Havens

    Harry Havens Well-Known Member
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    Ethanol and regulations has again cropped up in the news. http://www.reuters.com/article/us-usa-biofuels-idUSKBN19Q27M
    It does make for some strange bedfellows, with environmentalists and big oil on one side and the corn belt on the other. Even the auto industry leans towards the environmentalists and big oil. For the auto industry and big oil, it is about the so called blend wall.

    In any case it adds about 8¢ to the price of a gallon of gasoline for e10 due to the RINs price and the penalty price can be reflected in the difference between e10 and conventional.
     
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  8. Tim Burr

    Tim Burr Well-Known Member
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    Having worked in Ethanol production for 15 years,
    I try to follow the ins and outs of the fuel battle.

    Just wanted to throw out that the corn used in Ethanol
    production is what they call 'field corn'.
    It's not the sweet corn used for canned/frozen eating corn.

    Also, after the process is completed, the left over 'Distillers
    Grain' is high in protein and is used as a 'finish' feed for livestock.
    Nothing goes to waste.

    Just a FYI for those who might be wondering.
     
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  9. Harry Havens

    Harry Havens Well-Known Member
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    The weekly EIA report... https://www.eia.gov/petroleum/weekly/
    My summary chart...
    upload_2017-7-6_16-50-30.png

    Nothing really to see, as demand is still weaker than last year. There is a nervousness across a lot of commodities and stocks, with its roots stemming from the Bond Market. That is a subject for a different place and time.
     
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  10. Harry Havens

    Harry Havens Well-Known Member
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    Almost forgot I created this thread, so here is the latest chart (my creation), from this week's EIA report (their creation).
    upload_2017-7-26_18-12-57.png

    The total U.S. Crude (including SPR) and Petroleum products inventory has now below the 2 Billion barrel mark for the first time in 18 months. That is still about 200 Million barrels above what was once considered normal.
     
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  11. Harry Havens

    Harry Havens Well-Known Member
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    For anyone interested, this is the latest EIA data I have compiled from the report released 8-23-2017.
    upload_2017-8-24_11-10-5.png

    It continues to show a drop in gasoline inventories, but the where is quite noticable, imo. P.A.D.D. (Petroleum Administration of Defense District) #2 and #3 have shown an increase in inventories over last year's higher than normal levels.

    With Harvey projected to be a major hurricane by tomorrow evening, I thought it of interest to provide possible impact areas, related to refining.
    upload_2017-8-24_11-19-17.png

    I added Baytown and Deer Park as they have been having an impact on gasoline prices in some parts (12¢) of the country prior to Tuesday. Deer Park shut down due to a fire and has to restart and Baytown was supposed to start up last week from scheduled maintenance, but has "struggled" to do just that.

    As Harvey appears set to wander around the Corpus Christi area into next week, it would be hard to project the ultimate impact on that area's refineries. That area is not a major seaborne petroleum shipping point.

    Which brings me to this final thought. With the Baytown/Deer Park troubles, gasoline shot up 6¢ and then started to calm back down by 4¢ before starting up by 6¢. How much of that is due to Harvey and how much is due to a nervousness about some spaghetti models indicating something brewing off the Carolinas by early next week? Those few models are not projecting landfall, but could be disruptive to shipping lanes into the New York Harbor region.
     
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  12. Ken Anderson

    Ken Anderson Veteran Member
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    I don't have anything to add to this thread, other than to say that I appreciate it.
     
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  13. Harry Havens

    Harry Havens Well-Known Member
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    Thank you. I would point out that my postings should in no way be considered investment advice, but rather the ramblings of an old fool (me).
     
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  14. Rob Mowrey

    Rob Mowrey New Member
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    There are hundreds of patents world wide for free energy devices so if the governments quit backing the money people we have free energy , electric cars that can go with out needing charges ,cutting pollutions maybe even making anti gravity devices possible ?
     
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  15. Harry Havens

    Harry Havens Well-Known Member
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    LOL...
     
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  16. Harry Havens

    Harry Havens Well-Known Member
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    As it now is projected to wander around and dump up to 3' of rain in the area from Corpus Christi to NE of Houston, the impact could turn out to be very huge on gasoline prices. Houston/Galveston refines 2.2bpd, Beaumont area refines 1.2mbpd and the Lake Charles, La. area refines about 800kbpd. That adds up to 4.2mbpd or about 24% of this nations capacity. Looking at just gasoline, these refineries produce about 1.9mbpd of gasoline. I am NOT suggesting that all that would be stopped, but the potential for some portion of that production to be taken off line is quite realistic, imo.
     
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  17. Rob Mowrey

    Rob Mowrey New Member
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    Energy is free you build a Dam and a lake builds up behind it but in a year all the water that was there has flowed through the dam . But there is still water in the lake because the sun picked it up and put it back in the lake , so what costs is the device for collecting the energy. Now the question is how much do we spend to build a device that will collect it . A couple hundred or billions . If the device cost a hundred or a thousand and would run your home or car for years would you do it and think of the jobs it would create every building would be refitted every vehicle would have to be refitted or replaced.
     
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  18. Frank Sanoica

    Frank Sanoica Very Well-Known Member
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    @Harry Havens
    But, are they being built? Or, WILL they be built? What agency might be involved in influencing these questions? Frank
     
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  19. Frank Sanoica

    Frank Sanoica Very Well-Known Member
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    @Tim Burr
    The starving in the world would also be happy to be able to consume the Distillers Grain".
    Frank
     
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  20. Frank Sanoica

    Frank Sanoica Very Well-Known Member
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    @Harry Havens
    Just how much does Hurricane activity affect refineries? Obviously, they operate 24/7, no matter what. I don't seer refining as a particularly electric-power intense activity, so back-up power might not be terribly costly invested up front while building a refinery. Or?
    Or, might the unscheduled shutting down of a refining operation be woven into the original "plan"? Frank
     
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  21. Frank Sanoica

    Frank Sanoica Very Well-Known Member
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    @rob mowrey
    Am having a bit of difficulty understanding your wording, but find it intriguing, the part I follow. Could you clarify your thoughts here a bit, for this foggy old fart? Frank
     
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  22. Harry Havens

    Harry Havens Well-Known Member
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    Unless the dam is built by beavers, there is a cost. Granted Hydroelectric is more efficient and we should see more being built. But why does the USA lag behind the rest of the world? Ecologists worried about river ecosystems. Then there is the factoid that smaller hydroelectric projects cost more per KWH to build that large plants. In a nut shell, cost and efficiency are the drivers, yet there is no such thing as free energy.
     
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  23. Harry Havens

    Harry Havens Well-Known Member
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    A. They are being built, but largely by foreign companies, as the U.S. has limited capacity for building these type ships.
    B. Terminals are currently the biggest problem. Existing. The timeline for completion of the approved projects is not readily known by me. However, the FERC seems to be the determining agency.
    C. The Jones Act prevents foreign flagged ships from movement of materials along the coastal waterways of the U.S. Over the past few years there have been attempts to expand this to exports as well. Currently there is a bill in Congress to require 30% of LNG exports be shipped on U.S. flagged vessels. The bill seems to have stalled. The idea was to force more ship building (and jobs) back to the U.S. but expansion of U.S ship building would push the timeline very far out and likely make U.S. LNG too costly versus the rapid rise of "other" countries entering the market.

    So the current problem seems to be lack of shipping. Which of course, also requires feeder pipelines etc. Currently shale oil production is being inhibited by too much natural gas and the resultant flaring bumping up against EPA restrictions. The increases in overall U.S. production seems to be in reopening of old traditional wells. Not sure how much longer that can last.
     
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  24. Harry Havens

    Harry Havens Well-Known Member
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    Last part first... the refineries have been having a field day since oil prices plummeted in 2014. Gasoline consumption is up, exports are way up, etc. If there has been one major problem it is refineries foregoing some regular maintenance to keep the money rolling in. So I don't think an unexpected shutdown is part of any plan.

    A reliable unblinking electrical system is required for control systems, etc. Setting that aside, if we are to believe the electric car industry (and I can find nothing that would dispute their findings), every gallon of gasoline requires 6KWH to produce. (What I did find from 2005 EIA data would suggest that is fairly accurate across the entire stream). Now consider 42 gallons in a barrel and a place like Baytown with nearly 600Kbpd flow. Not sure how much backup would be required or the reliability.
     
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  25. Ken Anderson

    Ken Anderson Veteran Member
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    In Maine, the agenda is to remove hydroelectric dams, and some have been removed already. We have two dams just outside of town, but both have been sold to a Canadian company and sell electricity to Canada, not Maine, while we pay high transfer costs to get our power from elsewhere.
     
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