Commentary On The SPR -- April 22, 2024

Locator: 47056SPR.

I can't recall if I've ever posted my thoughts on the SPR. I've thought about it often since around 2018 or thereabouts. Before Covid. 

I've long questioned the need for an SPR. One of my pet peeves: the memes about depleting the SPR. There's a reason CBNC seldom even mentions the SPR except as a political / headline interest when the president makes an announcement.

So, with that, a deep dive, but only two links. That's all I have time for and about as interested as I am in this subject. The first link, from 2009, is a very, very old document and may not have much relevance today but it does provide a nice historical perspective.

This paragraph was particularly noteworthy, and the reason I posted this link.

The meaning of a “severe energy supply interruption” has been controversial. EPCA intended use of the SPR only to ameliorate discernible physical shortages of crude oil.

However, the American Clean Energy Leadership Act of 2009 (S. 1462), reported in the Senate, would require that the SPR include 30 million barrels of refined product; would transfer authority for a drawdown from the President to the Secretary of Energy; and would amend the drawdown authority to permit drawdown and sale in the event of a “severe energy market supply interruption” that has caused, or is expected to cause, “a severe increase” in prices.

This language is a significant departure from existing authorities which predicate drawdown disruptions in supply, and discourages use of the SPR to address high prices, per se.

However, the was never even voted upon in the US Senate. From wiki:

The second link is from earlier this year.

Whether or not language regarding the SPR and managing the price of gasoline has ever been codified (I don't know), the current president if very clear about this.

The largest series of oil releases from the SPR, by far, has been in response to the oil price hikes in the wake of the Russian invasion of Ukraine, which began in February 2022 (Neely, 2022). On March 1, 2022, the International Energy Agency coordinated an international release that included 30 million barrels from the U.S. SPR. In the following 8 months, President Biden ordered the release of an additional 340 million barrels of oil. The 370 million barrels in these invasion-of-Ukraine SPR releases was 64 percent of the SPR stock on February 25, 2024, and greater than the combined total of all other releases since 1985.

The Biden administration argued that the releases substantially lowered gasoline prices, and it is very likely that any supply increase lowers prices to some extent. To put the drawdowns in context, however, the U.S. Energy Information Agency reports worldwide production and consumption of about 97.3 million barrels of oil per day, of which the U.S. consumed about 20.3 million barrels. Therefore, the 370 million barrels released over 8 months amounted to about 1.6% of world oil production during that time.

The president is certainly acting in line with the DOE's articulation of the purpose of the SPR.

This raises the issue of the best purpose for a strategic reserve of any sort. On the one hand, the government could act as a private long-term speculator, keeping a strategic reserve that can be drawn upon when prices are high and refilled when prices are low. Such a strategy would tend to make money and stabilize market prices. In fact, Milton Friedman argued that profitability was a good measure of whether a trading strategy stabilized or destabilized asset prices. The Department of Energy describes the purpose of the SPR in this way, saying that it is "used to alleviate the market impacts of both domestic and international disruptions" (Department of Energy, 2024).

Be that as it may, a few things:

• the SPR, as originally intended, no longer matters;
• the SPR provides a great political asset for any president;
• the SPR has "no" effect -- other than possibly a short-term psychological effect -- in affecting the price of gasoline.

The price of gasoline is:

• to some extent local; there is no "real" national price;
  
• a political talking point;
• determined by so many other factors, that for all intents and purposes, the SPR is irrelevant

Fact:

• the price of gasoline is affected much more by government policies and regulations than the status of the SPR (exhibit A: California)
• release the entirety of the SPR and the price of gasoline is unlikely to change significantly in California
• California would not have the refineries to manage all that oil and the state doesn't have the resources to absorb the refined product even if refiners outside California could provide it

The US is approaching 5 million bopd in crude oil exports. It would be interesting to know what would be required to push US exports to 5 million bopd on an on-going basis.

Arithmetic: 5 x 30 = 150 million bbls / month.

Here is the history of the SPR drawdowns since 2015. Compare each draw with 150 million bbls / month that is currently being exported and then consider that if pushed to shove, the US could easily add another three million bopd production more than it currently produces (90 million bbls / month).

Stop exports today and in less than a week the amount not exported would surpass every SPR withdrawal since 2015 except one. This needs to be fact-checked. I must be missing something.

If my arithmetic is wrong, this is from the link above regarding Biden's announced releases in the past eight months: the 370 million barrels released over 8 months amounted to about 1.6% of world oil production during that time.

The world would not miss that US oil: the Mideast could easily replace it. 

Anyway, gotta stop here. In a long note like this there will be content and typographical errors. If this matters to you, go to the linked sources.

Is there enough pipeline capacity and shipping capacity to handle that much more crude oil for export? One may want to check the most recent Bloomberg report regarding EPD's new deepwater export terminal. I think the story came out yesterday. I'm not going to post it or link it for now. 

Bottom line: the SPR is nothing more than a political "asset" for the president. It's not going to go anywhere any time soon. But, as originally intended, the SPR no longer matters.

This matters not at all, but for the record: which presidents filled and depleted (used loosely) the SPR?

Investing: The Big Stories Today -- Tech, Copper, And Oil -- The Bakken With Three New Permits; MRO Reports Two DUCs Completed -- April 1, 2024

Locator: 46887B.

NASDAQ eked out a gain. That is simply amazing. After all the chatter for the past three days, TSLA finished absolutely flat. Movers and shakers already know the deliveries / sales numbers that will be released tomorrow.

More on this later. Going to pick up Sophia, but the tech story was very, very interesting today.

Not all tech is the same, not all chips are the same. 

But other than that, today's market didn't tell us a thing except that investors are still bullish on stocks. The Dow was down for a reason. But all-in-all, the bull market is "broadening" out. 

DJT plummets. Market cap / valuation dropped $1 billion.

Inflation, link here:

Earnings, link here:

EPD, link here:

 US oil exports, link here:

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Never Quit Reading

I first started investing in AMD back in 1994 after reading an article in Scientific American. Never sold, just kept buying.

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Back to the Bakken

Active rigs: 38.

WTI: $84.04.

Three new permits, #40630 -  #40632, inclusive:

• Operators: Valkyrie (2); Hess
• Fields: West Ambrose (Divide); Manitou (Mountrail)
• Comments:
• Valkyrie Operating has permits for two Aaberg wells, NENE 17-162-100, Divide County, 
• both to be sited 244 FNL and one to be sited 477 FEL and the other 437 FEL;
• Hess has a permit for an EN-Hanson A well, SEW 31-156-94, 
• to be sited 1160 FSL and 2210 FWL.

Permit renewals:

• BR (6): BR has permit renewals for two Carlsbad permits, Twin Valley, McKenzie County; one Carlzama permit, Elidah, McKenzie County; and three Mazam permits, also, Elidah, McKenzie County;

Marathon reported two DUCs completed:

• 39919, 3,241, Quam 11-22H,
• 39989, 4,569,  McBride 11-22H, 

A well of interest, now IA, since 8/23:

• 17971, 393, MRO, Isabelle Hartmen 42-22H, Murphy Creek, t9/09; cum 196K 7/23;
• 25761, IA/1,810, MRO, Kathryn Kukla 14-34H, Murphy Creek, t12/13; cum 215K 10/23;
• 25760, IA/1,757, MRO, William Kukla 24-34H, Murphy Creek, t12/13; cum 205K 10/23;

US Exports Record Amount Of Crude Oil And Refined Oil Products Last Week; Reaches 10 Million BOPD, Second Time Ever -- Apriil 20, 2022

US exports, link here:

This must drive some folks in the White House absolutely nuts, but they love the money it brings into the US.

A Record -- I Missed It -- April 17, 2022

Link here. 

I'm sure this was widely reported in the press but somehow I missed it.

Remember:

• March, 2020: the global lock downs begin

US natural gas exports: link here.

SPR Release News To Be Released Today -- November 23, 2021

SPR release: that's the buzz, but it could change at the last moment. But as it stands now, expect Brandon to make a convoluted statement on releasing oil from the SPR. 

Note that a release is a "swap," not a sale. All oil released from the SPR must be re-paid later on down the road. 

Related:

• in additon to SPR release, small but vocal group of US House dems also want ban on US oil exports; link here;
• a bit of background first, public policy; Ballotpedia;
• a ban could certainly happen; Obama supports a ban, apparently;
• it's almost a bridge too far, but quite possible
• huge chance that Dems will make a huge mistake on oil export ban
• crude oil under $80 isn't even that expensive in the big scheme of things
• a release would have only a temporary effect, and it's possible the price of oil will be much higher six months from now
• Forbes not convinced it would be a good idea; link here;
• would disrupt global channels that have been years in the making
• would immediately raise Brent, and gasoline prices historically follow Brent pricing (per some talking head; I'm not convinced; one would think US gasoline prices linked closer to WTI)
• questionable whether it's even legal; like many of Brandon's executive orders could be overturned by the courts;
• US crude oil exports reached record levels in 2020 and remain high in 2021; EIA;

US Crude Oil Exports Hit Record High In 2020 -- February 5, 2021

Link here.

Total domestic crude exports averaged about 3.2mn b/d in 2020, up from 2.98mn b/d in 2019, the previous record high, according to trade data released today by the US Census Bureau and monthly figures from the Energy Information Administration.

That's a 7.4% increase year-over-year.

In December, US crude exports averaged 3.35mn b/d, up by about 23pc from 2.73mn b/d in November with China regaining its position as the top destination.

US crude exports destined for China averaged about 719,000 b/d in December. China had been the top destination for US crude loaded in May-October, but its intake fell sharply in November when India took the top spot. India in December was the second top destination for US crude, with about 560,000 b/d, a record high for US exports headed to that country.

State-controlled Indian refiners in December expanded their import portfolios to include more US grades, with IOC now including West Texas Light (WTL) as an eligible grade in their weekly import tenders and Hindustan Petroleum (HPCL) issuing a unique tender that sought Mars for its Vizag refinery in January and February.

Meanwhile, US ultra-low sulphur diesel (ULSD) exports to Mexico surpassed year-earlier levels in December as overall shipments edged higher.

Much more at the link. Imagine all the men and women who showed up on a daily basis during a pandemic to make this happen. At some level, this simply blows me away. There are many, many story lines.

One Wonders How Fast Biden/Harris Would/Will Reverse This Metric -- The US Is A Huge Polluter, A Huge Contributor To Global Warming According To Both -- October 8, 2020

This might be the first thing Biden/Harris need to do to reverse to get Chinese off oil: ban US oil exports. 

But until they do, it's quite a story, quite a record. In just three years went from "956" to #3,267" or a 3.4x-fold jump in production. Is this a 340% jump in exports over three years. Whatever.

US crude oil imports, link here.   

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Doofus

As Kamala herself said: you can't believe a thing I say (that was with Stephen Colbert). 

The good news: no thinking US Senator would listen to Kamala. This was pure entertainment for the unenlightened. I didn't watch the debate but I doubt her  opponent cared one way or the other was Kamala said.  Link here: https://www.breitbart.com/politics/2020/10/08/fact-check-kamala-harris-makes-up-false-quote-from-abraham-lincoln/.

First-Ever WTI Oil Cargo To Arrive At Odessa (Ukraine) -- May 20, 2020

From Reuters:

Ukraine’s Black Sea port of Odessa is set to receive on Wednesday its first ever West Texas Intermediate (WTI) oil cargo from the United States ....

Industry sources said that the UMLMA tanker has shipped in BP’s 80,000-tonnes cargo for further delivery to the Kremenchug refinery of Ukrtatnafta. The value has not been disclosed.

Kiev has moved to diversify its energy supplies from its ex-Soviet master, Russia, following Moscow’s annexation of the Crimean peninsula in 2014 and subsequent flair-up of pro-Russian insurgency in eastern Ukraine. 

Odessa last received an oil cargo from the United States, the Bakken crude blend, in March. 

What's on her mind?

 

U.S. Total Energy Exports Exceed Imports In 2019 For The First Time In 67 Years -- EIA -- April 26, 2020

Link here.

U.S. Net Petroleum Exports Hit Highest Ever In February -- EIA; Saudi Royals Detained On Twitter -- March 7, 2020

From the EIA:

Bernie: let's kill the US oil sector. By the way, that's exactly what Russia wants to do. Coincidental? I think not. Wow, talk about collusion. And delusion.

Biden: WTF just happened?

This is what just happened: The United States was a net exporter of crude oil and petroleum products last month, with the four-week average net imports at a negative 907,000 barrels per day (bpd) in the last week of February, the lowest ‘imports’ level in EIA data dating back to 1973, according to EIA’s weekly data on net imports of crude oil and petroleum products.

Most ludicrous comment by EIA which the agency continues to iterate: despite the US, as a whole, being a net exporter, most regions of the US are still net importers of oil. California, Florida, Arkansas, and Idaho are huge importers of oil. Just saying.

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Saudi Arabia Foreign Exchange Reserves

News item: Prince MBS detained three more high-profile princes this past week. Just saying. Occurred about the same time the OPEC+ meeting dissolved into chaos with Saudi losing bigly.

Link here.

And we all thought ZeroHedge being permanently banned from Twitter was bad. It could be worse. I was completely unaware that one could be detained by Twitter. OMG! It's worse than I thought!

Enbridge Joins EPD -- SPOT -- Texas -- December 10, 2019

Some of this has been reported previously, but if I understand this correctly, what was once a sole EPD project, Enbridge has now been brought on. Posted elsewhere:

December 10, 2019: from Rigzone --

Enbridge Inc. and Enterprise Products Partners L.P. have agreed to jointly develop and market a deepwater offshore crude oil export terminal capable of fully loading very large crude carrier (VLCC) vessels, Enbridge reported Monday, December 9, 2019.

The companies have signed a letter of intent under which they will finalize an equity participation agreement granting Enbridge an option to purchase an ownership interest in Enterprise’s Sea Port Oil Terminal (SPOT) if SPOT receives a deepwater port license.

Enterprise also noted the SPOT project would comprise onshore and offshore facilities including a fixed platform approximately 30 nautical miles off the Brazoria County, Texas, coast in approximately 115 feet of water. The company added that SPOT would be designed to load VLCCs at rates of approximately 85,000 barrels per hour – equating to approximately 2 million barrels per day.

Enbridge’s involvement in SPOT will help the company provide its North American light and heavy crude customers with access to the Houston-area refining market and growing global demand.

That last paragraph is why this gets a stand-alone post: this is an important development for the Bakken. 

Australia Negotiating WIth US On Emergnecy Oil Supplies; A Note From A Reader On Australia - US LNG Exports -- August 2019

Updates

Later, 5:11 p.m. Central Time: wow, wow, wow, and wow. How interesting. The rest of the story.

Later, 1:05 p.m. Central Time: the tweet below simply says that Australia is negotiating with the US on emergency oil supplies. No timeline is provided. Is Australia looking out twenty years from now, or a year from now? Here's my take on the likelihood that Australia is negotiating with the US on emergency oil supplies based on data looking:

• 50 years out: 0% chance or 0% likely that the negotiations are based on data projected for 2075
• 25 years out: 5% chance or 5% likely that the negotiations are based on data projected for 2050
• 20 years out: 10% .... projected for 2040
• 10 years out: 15% ... projected for 2030
• 5 years out: 20% ... projected for 2025
• 1 year out: 50% chance

Yeah, the next video on this page might be appropriate. If nothing else, it's fun to listen to.

Original Post 

Memo to "First Squawk": enough with the caps.

Life During Wartime, Talking Heads
With regard to the twitter screen shot above. I happened upon that tweet about 9:00 a.m. this morning. It would have caught my attention regardless but a note from a reader last night "primed" me to see that tweet.

It should be noted this particular reader is particularly knowledgeable about this particular subject.

Here's the reader's note from last night.

That LNG daily export chart will show another 50% to 75% bump by year's end.

Six years out, it will easily double again ... gar own teed.

Current world's leading LNG exporter, Australia, will IMPORT LNG from USA (via Port Kembla's FSRU) in 16 months' time.

Contract with Cheniere has already been signed.

I find that absolutely incredible.

"Americans" have no idea how big this story -- the shale revolution story -- is and will be.

By the way, know what I found most rewarding about that short note? This one word: "Cheniere."

I noted the Cheniere / Chile connecting dot in the linked post above.

Making America Even Greater Tomorrow -- July 9, 2019

Updates

December 10, 2019: from Rigzone --

Enbridge Inc. and Enterprise Products Partners L.P. have agreed to jointly develop and market a deepwater offshore crude oil export terminal capable of fully loading very large crude carrier (VLCC) vessels, Enbridge reported Monday, December 9, 2019.

The companies have signed a letter of intent under which they will finalize an equity participation agreement granting Enbridge an option to purchase an ownership interest in Enterprise’s Sea Port Oil Terminal (SPOT) if SPOT receives a deepwater port license.

Enterprise also noted the SPOT project would comprise onshore and offshore facilities including a fixed platform approximately 30 nautical miles off the Brazoria County, Texas, coast in approximately 115 feet of water. The company added that SPOT would be designed to load VLCCs at rates of approximately 85,000 barrels per hour – equating to approximately 2 million barrels per day.

Enbridge’s involvement in SPOT will help the company provide its North American light and heavy crude customers with access to the Houston-area refining market and growing global demand.

Original Post 

Some years ago, RBN Energy provided a "what's coming" list with regard to LNG export terminals for the US. Now, RBN Energy is providing a similar list regarding new offshore crude oil terminals.

The key word there: offshore. 

From RBN Energy today:

While expansion projects at onshore terminals allow their developers to build off of existing infrastructure, what they cannot do — at least so far — is enable their docks to fully load deep-draft, 2-MMbbl VLCCs, which are the most cost-efficient waterborne means for transporting crude long distances (like from the Gulf Coast to Asia).

To fill a VLCC to the gills, you need more than 72 feet of draft, and to get that along most of the Texas and Louisiana coast, you typically have to go out at least several miles. Hence, the growing importance of deepwater offshore terminals like the Louisiana Offshore Oil Port (LOOP), which since the early 1980s has been receiving VLCCs fully laden with foreign crude — and since early 2018 has been sending out a small but growing number of VLCCs filled to the brim with U.S.-sourced oil.

LOOP is still the only Gulf Coast facility capable of fully loading VLCCs.

Otherwise, VLCCs exporting crude are generally reverse lightered in specified deepwater lightering areas in the Gulf — a couple of onshore terminals (Moda Midstream’s Ingleside facility near Corpus Christi, and Seaway’s Texas City terminal) can load VLCCs about halfway at their docks, then top them off via reverse lightering.

The initial round:

• EPD: a 2-million bopd Sea Port Oil Termianl (SPOT) 30+ miles off the coast of Brazoria County, TX
• Enbridge/Oiltanking: a proposed 2-million bopd Colt Offshore Loading Terminal about 30 miles south of Freeport, TX
• Jupiter MLP: a 1-million bopd terminal project six miles off Brownville, TX
• Tallgrass Energy: a proposed 1-million bopd terminal near the mouth of the Mississippi River and Venice, LA
• Trafigura: a proposed 0.5-million Texas Gulf Terminal 15 miles off Corpus Christi
• Carlyle Group: Lone Star Ports, onshore crude export terminal on Harbor Island, near the entry to the Corpus Christi Ship Channel; would deepen the channel entry to 75 feet to allow full loading of VLCCs

Latest: two newer offshore crude export terminals; both filed applications with MARAD over the past few weeks --

• Sentinel Midstream: a proposed 1-million bopd Texas GulfLink project; 33 miles off the coast of Freeport, TX
• Phillips 66: a proposed 1-million bopd Bluewater Texas Terminal (Bluewater, for short); 17 miles off Corpus Christi

As a reader suggested when RBN Energy posted the LNG export terminal list, just because a company has filed an application doesn't mean the project will get off the ground (or in this case, get off the water). So, that's the disclaimer, as it were.

So, let's add up the "export capacity" for the above listed proposed projects:

1. EPD: 2
2. Enbridge: 2
3. Jupiter: 1
4. Tallgrass: 1
5. Trafigura: 0.5
6. Carlyle (onshore): unknown, but let's call it 1 million b/d
7. Sentinel: 1
8. Phillips 66: 1
9. Total: almost 10 million bopd new export capacity

Is 10 million bopd plausible? See this note posted earlier today. Wood Mackenzie says the Permian will add 4 million bopd takeaway capacity by 2022 and that will still be much less than required by the mid 2030s.

Just imagine when the rest of the world runs out of oil (as predicted by the Peak Oilers) and the US government applies a $25/barrel tax on all outgoing crude oil to pay for "Medicare For All." Something tells me Occasional-Cortex will be able to do the math by then. Okay, I'm joking (choking?) on that one.

What a great country.

Keeping America Great -- EPD To Expand Export Capacity In The Channel -- July 8, 2019

From S&P Global, Platts:

• EPD will expand its ability to export crude, LPG, and polymer grade propylene
• will expand the Enterprise Hydrocarbon Terminal, Houston Ship Channel
• to build an eighth dock at that facility
• will accommodate a Suezmax tanker, the largest ship able to navigate the Ship Channel
• will add 840,000 bopd; will bring capacity to 2.75 million bopd
• expansions to load an incremental 1.3 million b/d of LPG, propylene, and LPG
• in service by 4Q20
• EPD estimates US crude oil exports to hit 8 million bopd by 2025
• April, 2019: the US Gulf Coast exported 2.6 million bopd (EIA)
• EPD expects the US LPG export market to double from 1.4 million BPD to 2.8 million BPD by 2025
• April, 2019: Gulf Coast exported 1.3 million BPD of LPG; total US LPG exports, 1.7 million b/d

Much more at the link.

By the way, the eight-year court case between EPD and Energy Transfer is going to the Texas Supreme Court, link at SeekingAlpha (this link may break over time). Archived here.

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LNG Feedgas Demand Hits Record Highs

From twitter:

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US NG Injections At Record Pace 

Injections: exceeding five-year average by 41%

Posted earlier today by the EIA, from twitter:

Making America Great! US To Be Net Exporter Of Gasoline First Time Since 1960 -- May 20, 2019

Almost 60 years ago: last time the US was a net exporter of gasoline.

From twitter today:

Responses:

• Obama: we can't just drill our way to lower prices.
• Bernie: resist!
• Buttigieg: we must change direction! 
• Beto: re-set! re-launch! re-ject!
• Biden: what just happened?

The "Long Pole In The Tent" -- US Crude Oil Exports -- May 20, 2019

For background, see these two posts:

• May 15, 2019; later;
• May 15, 2019; earlier

The issue is the "long pole in the tent" when it comes to US crude oil exports. Today, RBN Energy provided a nice update / analysis, re-posting:

RBN Energy: crude exporters navigate gulg coast terminal constraints. Archived.

This blog is based on research from Morningstar Commodities. A copy of the original report is available here.

U.S. crude exports out of the Gulf Coast averaged more than 2.4 MMb/d in the first four months of 2019 — using infrastructure that is increasingly constrained by a lack of deepwater ports. U.S. crude is reaching destinations worldwide, with large volumes traveling long distances to Asia on gargantuan 2-MMbbl vessels — Very Large Crude Carriers (VLCCs) — loaded offshore by ship-to-ship transfer. Shipments to Europe are primarily on smaller Suezmax and Aframax vessels. Overall, the increased marine activity is testing the limits of existing infrastructure. Today, we analyze the past 16 months of crude export vessel movements and their impacts on Gulf Coast ports. (We’ll also be discussing this and other critical trends related to U.S. export markets live and in person.

Some other data points and narrative from that analysis:

We’ve covered the development of U.S. crude exports extensively in the blogosphere since the ban on most overseas shipments was lifted in December 2015. Exports from the Gulf Coast are growing and expected to increase further as new pipelines from the Permian and Eagle Ford come online over the next two and a half years (see Hard Hat and a Hammer). In the less than four years since wide-open exporting began, the rapidly developing export market has overcome a number of challenges, like poor price transparency (see The Race is On) and the lack of deepwater terminals to load exports (see Rock The Boat). Actual shipments still require considerable logistical juggling as crude is loaded from smaller tankers onto long-distance VLCCs for voyages to Asia, as detailed in Berth In Reverse. And, as we’ve been discussing in our Slow Ride series, ports like the Houston Ship Channel are contending with increased congestion and the resulting difficulties in scheduling. Plans to expand the onshore ports — and build new deepwater terminals offshore — are in the works, but funding and executing on these projects is not easy and can take many years.

With the exception of the Louisiana Offshore Oil Port (LOOP) terminal 20 miles off the Louisiana coast in the Gulf of Mexico, the Gulf Coast is not blessed with deepwater ports that can accommodate massive VLCCs. These supertankers and a handful of their giant brethren — the 3-MMbbl Ultra Large Crude Carriers (ULCCs) — require at least a 75-feet of draft to load fully and are the workhorses of long-distance oil transport between continents. Most Gulf Coast terminals are restricted to a 45-foot draft that only allows them to fully load Aframax tankers holding 500-650 MBbl of crude or to partially load Suezmax tankers that hold up to 1.3 MMbbl. Analysis of the Crude Voyager data shows that during the 16-month period from January 2018 to April 2019, 548 different vessels made a total of 1,402 crude export shipments from Gulf Coast terminals. Of these shipments, 69% involved Aframax tankers, 21% Suezmax, and 6% smaller Panamax (less than 500 Mbbl); 3% were loaded directly onto VLCCs. (As we’ll get to in a bit, many of the smaller tanker loadings were for ship-to-ship transfers to VLCCs.)

RBN Energy then provides an in-depth look at current export terminal capabilities.

The detailed logistics involved in getting U.S. crude out of Gulf Coast terminals and on their way to export markets underlines the ingenuity of shippers that have built export volumes from next to nothing to more than 2.4 MMb/d in just four years. The upcoming tsunami of crude from new pipelines out of the Permian and Eagle Ford over the next two years will surely test the export infrastructure. That’s the reason behind a slew of new project proposals to build deepwater Gulf of Mexico terminals off the coast of Freeport (TX), Texas City (TX), Corpus Christi, Brownsville (TX) and Louisiana, as well as plans to expand part of the Corpus Christi harbor channel to accommodate fully loaded VLCCs. 

If one or more of the new deepwater terminals are built, they would reduce the number of ship-to-ship transfers needed to load export cargoes. Then, in theory at least, pipelines could seamlessly feed deepwater terminals and load VLCC tankers directly and efficiently. If for any reason those deeper terminals don’t get built, expect to see increased congestion as existing Gulf Coast docks struggle to handle ever-larger crude export volumes.

Two very important data points were not addressed:

• congestion: as we saw earlier this month, a small collision resulting in a small spill can shut down the entire port; and, 
• as we saw last year -- and see almost every summer -- hurricanes will definitely shut down the port

Oh-Oh! Trump Made THE Call. WTI Down Almost 4% -- Down $2.28 -- Trading At $62.93

Updates

Later, 10:27 a.m. Central Time: Z-Man tweets rumor that Trump will grant China waiver for Iranian oil. 

Later, 10:23 a.m. Central Time: wow, I just checked the twitter-sphere -- pundits are going nuts over Trump's call to OPEC.  Even Z-Man fails to note that this all goes back to Obama killing the heavy oil pipeline, called the Keystone XL. But twitter is afire following Trump's phone call to Prince Salman.

By the way, I used to follow Trump on twitter but quit following him after the Mueller report was released. It was just too much to follow.

Original Post 

Posted at 10:05 a.m. Central Time, April 26, 2019.

Wasn't it just two days ago pundits were talking $85 oil this summer?

WTI is plummeting. Gasoline prices this weekend should plummet. LOL. Let me know how that works out.

Trump gives Russia/OPEC carte blanche to open the spigots, kill US shale.

Barack Obama would have given a speech.

I think I read somewhere Saudi tracks Brent. I can't remember. I don't know. But Brent is also down. Down over 3%. Trading at $71.25.

OPEC basket, on the other hand, up slightly, at $74.04. Why would OPEC basket be rising (slightly) when WTI is crashing? The US needs heavy oil. The US is swamped with light oil.

Fortunately, Australia is starting to import US light oil. Link here.

Two cargoes of U.S. crude oil have been booked to sail to Australia, highlighting the increasing global reach of exports from the United States.

Aframax tanker Esther Spirit loaded U.S. oil in early April at Enterprise Houston Terminal and is scheduled to discharge at Kwinana in Western Australia on May 20.

BP Plc chartered the Silver Sun, an Aframax, to load from the U.S. Gulf Coast this week to Kwinana for $2.35 million. BP operates a refinery at Kwinana producing fuels for Western Australia.

And look at this, just the opposite of the US:

 “Australia’s aging refineries were designed to run regional crude that is typically light and sweet. U.S. crude is a good substitute for typical Australian refinery feedstock,”[somebody said.]

And to think the US would have a "goldilocks" oil situation had Obama not killed the Keystone XL. And folks on talk radio here in north Texas still get upset with Trump tweets. Get a grip. 

US crude oil exports:

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Word of the Day: Holometabolous

Link here, wiki.

Holometabolous, adjective for the noun, holometabolism.

Holometabolism, also called complete metamorphosis, is a form of insect development which includes four life stages: egg, larva, pupa, and imago or adult.

Holometabolism is a synapomorphic trait of all insects in the superorder Endopterygota.

Immature stages of holometabolous insects are very different from the mature stage.

In some species the holometabolous life cycle prevents larvae from competing with adults because they inhabit different ecological niches. The morphology and behavior of each stage are adapted for different activities. For example, larval traits maximize feeding, growth, and development, while adult traits enable dispersal, mating, and egg laying. Some species of holometabolous insects protect and feed their offspring. Other insect developmental strategies include ametabolism and hemimetabolism.

There are nine extant orders that contain holometabolous organisms, including butterflies and moths, beetles, and flies. There are two extinct orders.

If one wants an up-to-date look at insects, consider Natural Histories Innumberable Insects: The Story of the Most Diverse and Myriad Animals on Earth, Michael S. Engel, c. 2018.

Increased Storage Capacity Moves To Coast -- April 24, 2019

I remember all the posts on Cushing, Oklahoma, when I first started blogging, and analysts/pundits wringing their hands over inadequate US storage capacity. I was never worried.

The day the music died. They caught the CBR train for the coast:

American Pie, Don McLean

Making America Great -- One Barrel At A Time -- March 20, 2019

Links here and here.

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Lone Star State of Mind, Nanci Griffith

Sitting in Denver, sipping California wine,  I've got all night to remember [you];  I'm in a lone star state of mind. Wow.

Making America Great -- March 5, 2019

Data lags: but one can track US crude oil exports here.  It appears US crude oil exports hit an all-time high back in October, 2018. It's really quite amazing when one thinks about it.

Link to story here.

From twitter today: