Diesel, Gasoline Exports Soaring -- March 28, 2014

Updates

December 29, 2016: I think this is a most under-reported story -- soaring US gasoline, diesel exports. A story within this story is the soaring gasoline (and I assume diesel) exports to Mexico. This is a most incredible story. It started with a story on gasoline lines in northern Mexico. Then a couple days later, a story that a) gasoline consumption was soaring in Mexico; and, b) the country's integrated oil company (Pemex) could not keep up. Mexico was the world's 6th largest consumer of gasoline as recently as 2012, but has now jumped to #4. If things were not bad enough, because of Mexico's financial difficulties, the country will cut funding to Pemex, thus exacerbating the supply-demand situation. In the western hemisphere, this has to be among the top 5 energy stories in 2016. 

November 2, 2016: embedded chart. From 1 million bopd in 2008 to almost 6 million bopd now.

Original Post

RBN Energy: a must-read. "We" may not be exporting a lot of oil, but the diesel and gasoline exports are soaring.

Gulf Coast exports of diesel and gasoline are booming. Net exports of diesel have increased over 300 percent from an average of 232 Mb/d in 2009 to 746 Mb/d in 2013. Over the same period net gasoline exports from the Gulf Coast increased five-fold from an average of 87 Mb/d in 2009 to 439 Mb/d in 2013. Today we look at the drivers behind this dramatic export growth.

This blog is the first in a two part series looking at the drivers behind increased US exports of refined products from the Gulf Coast region. In this first episode we look at whether refining margins for diesel and gasoline are correlated to the level of exports. We then look at the extent to which export volumes are related to levels of refinery throughput at the Gulf Coast. In the next episode we will look at the impact of domestic demand for refined products (or the lack of it) on export volumes and then whether export volumes seem to be sensitive to international refined product prices.

Active rigs:

	3/28/2014	03/28/2013	03/28/2012	03/28/2011	03/28/2010
Active Rigs	195	186	206	169	105

***********************************

The New York Times

Russian sanctions could hurt Big Oil. Read the article; then ask yourself -- what was the hidden agenda? The New York Times is a huge supporter of President Obama; The Times is no friend of Big Oil. What was the hidden agenda? XOM was up almost 2% yesterday; COP was up almost 1% yesterday; CVX was flat.

The Wall Street Journal

Top story, front page: Russian border buildup stokes worries. There is some irony here: as Barack Obama cuts back the military, brings the forces home, Putin is filling the void. Predictable.

I guess the "key threshold moved." I thought it was 7 million. Whatever. The Barack administration says 6 million enrolled. And just last month the administration said they had no idea how many enrolled. The numbers are as meaningless as the unemployment numbers. The difference: we have earnings reports from the big insurers in 3Q14, 4Q14, and 1Q15. I can hardly wait to see what the new premiums will be for 2014 (I assume whatever they are, the president will cap them to this year's level).

Yesterday I made a comment regarding the market this year. And I noted that this is not an investment site, warning folks not to make decisions based on what they read here or what they think they might have read here. But today, a front section article in The WSJ says US corporate profits hit new highs last year, driven by the tight lid firms have kept on hiring and spending almost five years into the economic recovery.

A great article on how colleges will respond to unionized football's implications.

Chris Christie's lawyers says he is innocent. Well, duh.

Politically correct: top US military officer wants military to rethink ethics training. Starts with the commander in chief.

Obama seeks to repair Saudi ties. Political theater. I wouldn't read the article even if I had the time.

A portrait of the Malaysian Air pilots. I always said that's where investigators needed to look.

IMF will loan the Ukraine $18 billion. Here we go again.

Out of the closet. Microsoft brings out Office software for iPad. Speaks volumes. Microsoft will use the "old Ma Bell" business model -- rent.

Full use of the Office iPad app is limited to subscribers to Office 365, an online-friendly version that users "rent" for an annual subscription rather than buy to install on their computers. For consumers, Office 365 costs $99.99 a year.

Versace profit surges as sales strengthened. Lululemon reports higher sales.

Reported yesterday: Baxter to split into two companies.

Cargill plans to exit its division that trades global coal as well as European power and gas. It will create a new venture with a Brazilian company to combine global sugar-trading activities.

Japan's answer to Fukushima: coal power. 

Heard on the street: America Inc.'s profit margins have hit another record. Be careful what you wish for. 

Chief among the factors contributing to profit-margin expansion is the tight lid companies have put on costs. They have been slow to hire and slow to raise wages. Inflation has outpaced gains in private-sector employee compensation over the past five years, according to the Labor Department.

Spending on new equipment has been muted, too. Aggregate capital expenditure for members of the broad S&P 1500 index has grown by just 0.8% annually over the past five years, according to S&P Capital IQ. Low rates have allowed many companies to refinance debt, cutting interest costs. The effective yield on investment-grade corporate debt, according to the BofA Merrill Lynch Corporate Master index, is now 3.1%, versus 5.8% in December 2007.

Taxes have been low as well, in part as companies offset them with losses taken during the recession. Income statements from companies in the S&P 500 showed an effective tax rate, including state and local taxes, of 29% in 2012 versus 32% in 2007, according to ISI Group's David Zion. He calculates that their cash tax rate—what they actually paid—was 25% in 2012, against 31% in 2007.

Keeping costs low by refraining from hiring or not replacing equipment can only be done for so long, though. And long-term interest rates look more likely to rise than fall over the next year. Losses to offset taxes, too, eventually get used up.

This article conveniently forgets one word.

The Los Angeles Times

March Madness: Florida (1) beats UCLA (4). Arizona (1) beats SDSU (4). Wisconsin (2) beats Baylor (6). Dayton (11) beats Stanford (10). Every win was a blowout. Four games on tap tonight. Update on the president's bracket.

Not good news for the president: as Syria civil war drags on, the rebels are clearly losing. With Putin now in the cat-bird's seat, Syria sees clear sailing. I haven't heard a peep out of the administration, lately, on Syria.

Average gasoline price in California hits $4 a gallon. For the first time in months, most Californians are shelling out more than $4/gallon for regular gasoline. And with the busy summer driving about to begin....

The president and the Pope find safe ground on which to talk: the poor. Michelle and the girls are still vacationing in China as far as I know.

University of California head -- Napolitano -- throws cold water on the online education craze. Well, duh. I don't even have to read the article to know what that's all about.

The Dickinson Press

All that talk about an airport for Medora. Never mind.