Updates
April 19, 2022: not said in the note below -- the Keystone XL would have carried heavy oil from Canada -- the "right kind" of oil now needed by the US. Absolutely fascinating.
April 19, 2022: the comment below reminds me of our days in Germany buying heating for the first time; quite an experience.
April 19, 2022: see first comment -- for starters, this "US heating oil: $3 / gallon"
A couple weeks ago I was billed $1,040 for 204 gallons ($5.10 / gallon). A friend in New Jersey was heating his house by buying at the diesel fuel pump; their HO price was at $5.38 a gallon, with a 100 gallon minimum.
My sense is that it ties to the loss of Russian oil...you get more diesel per barrel out of a heavy crude than you do from a light one...that also explains the SPR release...
... as I commented elsewhere earlier today, my guess is this: the 1 million bpd release is meant to offset the loss of Russian oil, both for the US and Europe…
... remember that the administration’s first frantic moves were to try to get Venezuelan oil and even Iranian oil back on the market to cover that?
Russian Urals is a medium heavy sour crude, and for refineries that were built to use that kind of crude, one has to find an equivalent grade to replace it, or do some expensive blending of other grades to match it…the SPR is 60% heavier grades, so I'm assuming that’s why they’re pulling it out…most oil we get from shale is sweet and light, typically more expensive, but worthless when one is trying to replace Russian oil losses.
Original Post
First question: how much is the US producing? Link here. Answer: yawn.
- CNBC: suggesting it's a refinery issue. Perhaps. I don't buy it.
- mainstream media simply ignores the elephant in the room
Second question: how much is the US exporting? Link here. If this doesn't surprise you, nothing will.
Third question: why? In round numbers,
- US heating oil: $3 / gallon
- Germany: $6 / gallon
for starters, this "US heating oil: $3 / gallon"
ReplyDeletei couple weeks ago i was billed $1040 for 204 gallons. a friend in New Jersey was heating his house by buying at the diesel fuel pump; their HO price was at $5.38 a gallon, with a 100 gallon minimum...
my sense is that it ties to the loss of Russian oil...you get more diesel per barrel out of a heavy crude than you do from a light one...that also explains the SPR release...as i commented elsewhere earlier today, my guess is this 1 million bpd release is meant to offset the loss of Russian oil, both for the US and Europe…remember that the administration’s first frantic moves were to try to get Venezuelan oil and even Iranian oil back on the market to cover that? Russian Urals is a medium heavy sour crude, and for refineries that were built to use that kind of crude, one has to find an equivalent grade to replace it, or do some expensive blending of other grades to match it…the SPR is 60% heavier grades, so i’m assuming that’s why they’re pulling it out…most oil we get from shale is sweet and light, typically more expensive, but worthless when one is trying to replace Russian oil losses..
Thank you so much.
DeleteI noted that also about SPR being heavy oil for the most part, which explained a lot. Your note much more enlightening. Thank you.