They're Reading The Blog -- Californians Love Saudi Oil -- October 1, 2019

Updates

Later, 9:21 p.m. CT: I posted the original note earlier today. This evening, while proofreading and correcting typographical errors, I came across this story in LosAngelesCBSNews:



From the linked article:

Gas price hikes were blamed on unplanned maintenance issues at the Chevron and Marathon refineries in Los Angeles County and the absence of imported gasoline, according to the Automobile Club of Southern California.

Absence of imported gasoline? And why was that? Gasoline shipments from Europe to the Middle East surged after the attack on Saudi assets. Re-posting:

But look at this, link here:

From Reuters, the linked article:

Gasoline exports from Europe to the Middle East and Asia are set to surge this week after recent attacks on Saudi Arabia’s oil facilities crippled output at the kingdom’s refineries.

Over 400,000 tonnes of gasoline and gasoline blending components have been booked in the past week for loading between Sept. 21 and Sept 26 out of northwest Europe with Mideast Gulf delivery options, shipping data shows. The flow is the equivalent of around 500,000 barrels per day. [Why didn't they say that to begin with; who in the ... measures gasoline in "tonnes"? I guess you do when loading a sea-going tanker. LOL.]

It is unclear where the cargoes will end up, but traders said that Saudi Arabia’s state-run oil company Aramco is seeking to buy large volumes of refined oil products.

Europe’s exports of gasoline and blending components to Saudi Arabia averaged 60,000 bpd in the first five months of the year, according to data analytics firm Vortexa.

Original Post

They're reading the blog. LOL. I don't know how often I've said this: Californians prefer Saudi oil.

But here it is, in the WSJ over the weekend:

From the linked article:

Following the attacks on Saudi Arabia’s oil facilities last month, many forecasters warned that gas prices would spike. Yet prices have hardly budged—except in California, where they are surging due to policies that have made the state more reliant on foreign oil.

Gas prices in the Golden State have shot up 30 cents a gallon in the last week amid problems at in-state refineries to a statewide average of $4.03 a gallon and may be headed higher. Prices rose a mere 10 cents nationwide in the week after the attacks on Saudi facilities and have since ticked down a few cents.

A big reason gas prices didn’t spike after the Saudi attack is growing U.S. shale oil production, which has doubled since 2012 to about 12.5 million barrels a day and added about six million barrels to global supply. This has more than offset the 5.7 million barrels that were temporarily knocked out of Saudi production.

Yet oil production in California has declined about 18% since 2012 as older wells are exhausted and regulatory costs make it less profitable to drill new ones. California has made up for its declining domestic production by importing more foreign oil by tanker, especially from, you guessed it, Saudi Arabia—which emits more CO2.

Regulatory costs have also forced many refiners in the state to close. The California Energy Commission notes that “the cost of complying with environmental regulations and low product prices will continue to make it difficult to continue operating older, less efficient refineries.” Few refineries outside of the state produce the unique fuel blends required by California.

Thus when California refineries experience problems, retailers must import foreign gasoline at steep prices, a challenge partly exacerbated by the outages in Saudi Arabia. Add California’s 61-cent-a-gallon gas tax—the highest in the country—and this is why its gasoline prices are now nearly $1.40 higher than the U.S. average and $1.70 more than in Texas. 

Much more at the linked article.

As usual, the comments are the best part.