Refinery closes - price of oil goes up?
- Thread starter MGS
- Start date
It depends on the refinery. For example, if a Gulf Coast refinery that is specifically designed to burn high-sulphur Venesuelan crude shuts down, the gasoline produced by this refinery is no longer on the market. This raises gasoline demand at other refineries. The price of gasoline goes up. If the remaining refineries have to burn lower sulphur crude, the demand for that crude goes up, followed by the price.
Bernard
Bernard
These markets are highly irrational.
Crude prices should remain flat. A 70kbd refinery is a drop in the bucket in terms of national refining capacity. Major maintenance and process upsets happen regularly at the larger refineries that affect national output on a similar scale (10's of kbd), but are not reported.
It would make sense if refining margins improved slightly, but not that the price of crude changed.(be it sweet or sour)
Crude prices should remain flat. A 70kbd refinery is a drop in the bucket in terms of national refining capacity. Major maintenance and process upsets happen regularly at the larger refineries that affect national output on a similar scale (10's of kbd), but are not reported.
It would make sense if refining margins improved slightly, but not that the price of crude changed.(be it sweet or sour)
Gardner Barnes
250+ Posts
I am guessing that there is a serious amount of speculation going on in the oil markets right now which is inflating the price. My completely uninformed opinion is that investors have moved from IT stocks to RE to commodities to minerals and gold.
yeah yeah china and india blah blah blah
yeah yeah china and india blah blah blah
froghorn717
100+ Posts
txeconomist
250+ Posts
To clarify, are you saying that the Yuan is still pegged to the USD? Because I think it is pegged to a basket of foreign currencies. The USD, euro, yen, Korean won make up the biggest part of the basket IIRC… but I think there are like a dozen total currencies in the “basket….”
froghorn717
100+ Posts
txeconomist
250+ Posts
right... but as you continue you werent clear as to what you were saying the Yuan was pegged to currently...I wasnt sure if you were saying that Yaun was repegged to teh dollar at some point thereafter the 2% or whatever appreciation in 05... Not challenging your thoughts and opinions. Just trying to understand and clarify your passage for myself.
froghorn717
100+ Posts
right...no problem
the thing is that the basket is still heavily weighted to the USD...not sure of the exact %, but i would imagine they would not be real easy to find. In fact I doubt they are even published.
the thing is that the basket is still heavily weighted to the USD...not sure of the exact %, but i would imagine they would not be real easy to find. In fact I doubt they are even published.
back to the original post...
an outage at a small west texas refinery should have zero impact on the global crude oil market and even on the refined goods market except that futures in those products are so highly traded by banks and financial institutions.
the physical markets and the pricing are both fairly irrational, now, due to the cash many funds have in the futures market.
an outage at a small west texas refinery should have zero impact on the global crude oil market and even on the refined goods market except that futures in those products are so highly traded by banks and financial institutions.
the physical markets and the pricing are both fairly irrational, now, due to the cash many funds have in the futures market.
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