Vancouver Gas Prices Topping $2/L

[John Stone]

12 hours ago, LinkSoul60 said:

60% of US refinery capacity is designed for heavy crude and Canada exporting ~4M barrels per day of heavy crude to midwest and Gulf Coast refineries. 

Minor details...

The U.S. refineries primarily use imported crude oil (low sulphur) to produce gasoline, diesel and other. 

Imported crude is due to the specific types of crude oil needed for refining and the infrastructure limitations of domestic refineries - it is more cost efficient. 

Ergo, the increasing cost of gasoline is due to supply / demand. 

The cost of gasoline will continue to increase as long  as  the supply / demand crisis continues.

Is $150 / bbl possible

Entirely possible. 

[John Stone]

13 hours ago, paxamericana said:

You have that reversed but the same result, Us sells its oil to be refined over seas and refined the heavier (higher sulfur) content for domestic consumption. Which makes sense if you think about it. The heavy crude is cheaper than the light crude. Why not sell your higher quality crude to others and import lower prices quality crude. But make no mistake, the USA is a NET exporter. This also has the added benefit of creating leverage in the event of a geopolitical negotiation. The US can shut off oil export to Japan or South Korea as an example.

And to make it abundantly clear, it’s much more expensive to refine heavy crude with high sulfur content, only the best of the best refiners in the world have the technology to do so at scale and profit. Muricah! 

My dream job

Most of the U.S. light crude oil is imported

Middle East crude is mostly light sweet crude. Light sweet crude, also known as sweet crude, is characterized by low sulfur content, making it easier and cheaper to refine into fuels. 

Light crude oil is preferred for gasoline refining

[paxamericana]

44 minutes ago, John Stone said:

infrastructure limitations of domestic refineries

The wording is misleading. It’s not that the us can’t refine its own oil, we do. Our refinery can refine any oil. We just refine the heavy crude more since it’s cheaper.

[paxamericana]

25 minutes ago, John Stone said:

Most of the U.S. light crude oil is imported

Not factually correct, US domestic crude production is light.

26 minutes ago, John Stone said:

Middle East crude is mostly light sweet crude. Light sweet crude, also known as sweet crude, is characterized by low sulfur content, making it easier and cheaper to refine into fuels. 

Nope they are sour, higher sulfur content.

 

[John Stone]

28 minutes ago, paxamericana said:

Not factually correct, US domestic crude production is light.

Nope they are sour, higher sulfur content.

 

 

haha - I think what ur saying is  that most  of the U.S. light crude is not imported?

That said, it is true that about 60% of the crude oil processed in U.S. refineries is domestically produced  - frack. 

The oil industry is a lot larger than simply producing gasoline.  

I think we're going to have to agree to disagree on  the import thing, tho.

No telling how high  a barrel of oil  will get to ........... 150-200??

[John Stone]

38 minutes ago, paxamericana said:

The wording is misleading. It’s not that the us can’t refine its own oil, we do. Our refinery can refine any oil. We just refine the heavy crude more since it’s cheaper.

My mistake. 

However, refining light crude is generally considered more economical - greater profit than heavy crude.  

[paxamericana]

22 minutes ago, John Stone said:

However, refining light crude is generally considered more economical - greater profit than heavy crude.  

I think there’s a misunderstanding, light crude cost more to purchase because it is easier to refine as you say. Heavy crude is less expensive to purchase but requires more capital investment to refine at scale. The Us started investing refining heavy crude in the 1980s because we saw that the world’s oil is becoming more sour with impurities. Fast forward to present day. The US refining industry is the most advanced in the world, able to refine heavy crude at economical scale. Other countries’s refinery requires that they mix the light crude with heavy crude in order to refine it. 

[LinkSoul60]

4 hours ago, John Stone said:

The U.S. refineries primarily use imported crude oil (low sulphur) to produce gasoline, diesel and other. 

Imported crude is due to the specific types of crude oil needed for refining and the infrastructure limitations of domestic refineries - it is more cost efficient. 

Ergo, the increasing cost of gasoline is due to supply / demand. 

The cost of gasoline will continue to increase as long  as  the supply / demand crisis continues.

Is $150 / bbl possible

Entirely possible. 

It's $97 today....  I have a tough seeing $150 but if it does, there will be a heck of a lot of pain to be felt.  The world is going to feel this regardless but getting in that range would absolutely hammer everyone.  

[LinkSoul60]

2 hours ago, paxamericana said:

I think there’s a misunderstanding, light crude cost more to purchase because it is easier to refine as you say. Heavy crude is less expensive to purchase but requires more capital investment to refine at scale. The Us started investing refining heavy crude in the 1980s because we saw that the world’s oil is becoming more sour with impurities. Fast forward to present day. The US refining industry is the most advanced in the world, able to refine heavy crude at economical scale. Other countries’s refinery requires that they mix the light crude with heavy crude in order to refine it. 

So, the point being... you're not as energy rich as you seem to think you are.

[John Stone]

5 hours ago, paxamericana said:

I think there’s a misunderstanding, light crude cost more to purchase because it is easier to refine as you say. Heavy crude is less expensive to purchase but requires more capital investment to refine at scale. The Us started investing refining heavy crude in the 1980s because we saw that the world’s oil is becoming more sour with impurities. Fast forward to present day. The US refining industry is the most advanced in the world, able to refine heavy crude at economical scale. Other countries’s refinery requires that they mix the light crude with heavy crude in order to refine it. 

What do you think is causing the rapid increase in U.S. gasoline if  it is not due to imported crude. 

[herbie]

My Dad was head chemist and eventually a VP at a local refinery in the 1960s and 1970s. When they mandated the change to unleaded gas, companies were allowed by govt to chargw 4c/L more for unleaded to cover the conversion costs.
They expanded the refinery and added a whole new section just for unleaded. He told us that the modernixed section produced gas for 7c cheaper. Plus that 4c extra.
Point is, it is not like it's physically or financially impossible to switch from light to heavy crude that is exactly the goal of the refinery - to make maximum profit from the supply available.

IOW what I've been telling forum members for years. lose the "Can't"xervative thinking over every challenge, you can and that's exactly what you do in business. Adapt!

[paxamericana]

1 hour ago, John Stone said:

What do you think is causing the rapid increase in U.S. gasoline if  it is not due to imported crude. 

Of course, supply and demand, constraint supply means higher prices. Shutdown export using presidential authority, supply goes up and price point comes down.

Edited March 18 by paxamericana

[herbie]

Yeah that's it, restrict their market so they sell less and they'll lower the price for the buyers they have left... yeah that'll work.Tell Donnie DickTater, he'll buy that story,

[paxamericana]

1 hour ago, herbie said:

Yeah that's it, restrict their market so they sell less and they'll lower the price for the buyers they have left... yeah that'll work.Tell Donnie DickTater, he'll buy that story,

Point being, the US isn’t ever at any real threat of running out of oil. Not true for the rest of the world. Say asia and Europe or even Africa. The the oil prices is high enough, the us will start implementing a quota system of how much export refineries  will be allowed, you’ll see.

[John Stone]

14 hours ago, paxamericana said:

Of course, supply and demand, constraint supply means higher prices. Shutdown export using presidential authority, supply goes up and price point comes down.

Common knowledge that the U.S. is the largest oil producer in the World. 

With that a 'given' why is the U.S. vulnerable to rising oil prices and more specifically, rising gasoline / diesel prices? 

Are the majority of domestic refineries tooled for heavier grade crude and not the sweeter grade from shale?  

Heavier grades originating from Canada and Latin America? 

Ur point of blended crude is well taken. 

 

[herbie]

14 hours ago, paxamericana said:

Point being, the US isn’t ever at any real threat of running out of oil.

Moot point. The American will run out of money before then. The discussion isn't about who has the most, it's about the prices. North and South America don't "need" Middle East oil. The Oil companies do - to manipulate the market as they've always done.

 

[paxamericana]

45 minutes ago, herbie said:

run out of money before then

Nah, the poor people will not stand for that, prices are going to come down one way or another. Other countries are already implementing a price ceiling not realizing that they’ll face a shortage. In America, we just won’t go below 30$ a barrel for oil, that’s the break even price point. So price sensitivity for gasoline in America is 1.80-5.00 a gallon. With the upper price being a political problem and lower price being a profitability problem. But you know what won’t be a problem? A shortage.

Edited March 19 by paxamericana

[CdnFox]

10 hours ago, John Stone said:

Common knowledge that the U.S. is the largest oil producer in the World. 

With that a 'given' why is the U.S. vulnerable to rising oil prices and more specifically, rising gasoline / diesel prices? 

Are the majority of domestic refineries tooled for heavier grade crude and not the sweeter grade from shale?  

Heavier grades originating from Canada and Latin America? 

Ur point of blended crude is well taken. 

 

Not all oil is the same. You are still imports quite a bit and for a variety of reasons.

[John Stone]

13 hours ago, CdnFox said:

Not all oil is the same. You are still imports quite a bit and for a variety of reasons.

Of course.

The commercial viability of fracking made the U.S. a non-renewable energy giant. 

A heavier grade would have been pure manna tho. 

Edited March 20 by John Stone

[herbie]

So here up country gas has increased 43¢ a litre in about 4 weeks.

Seeing as I stop for a coffee or a snack every 3 or 4 hours and won't do over 8 hours the few times I road trip every year, A pure electirc is no longer out of the question, Why go half way on that hybrid?

After yesterdays callout, I will make the ranchers bring their computers to me rather than bash the shit out of my Jeep and risk my life on those mud & washboard roads. With an inch of water over ice in every shady stretch.

[herbie]

Someone posted a pic of the Chevron in Blaine Wahington at $5.69/gallon.

With the exchange rate you'd pay that amounts to almost the same as what you'd pay in downtown Vancouver....  

[User]

12 minutes ago, herbie said:

Someone posted a pic of the Chevron in Blaine Wahington at $5.69/gallon.

With the exchange rate you'd pay that amounts to almost the same as what you'd pay in downtown Vancouver....  

Yeah, Washington State already has some of the highest gas prices in the country because of taxes and other regulations. 

Why not look at what people are paying in Minot, North Dakota?

Also, if you are factoring in exchange rates, that is adding another 25% LOL

 

[herbie]

Because I don't live there so it doesn't matter, and the taxes haven;t gone up a penny in the last month.

Dupe

[User]

44 minutes ago, herbie said:

Because I don't live there so it doesn't matter, and the taxes haven;t gone up a penny in the last month.

Dupe

You live in Blaine, Washington?

Clown. 

[LinkSoul60]

5 hours ago, User said:

Yeah, Washington State already has some of the highest gas prices in the country because of taxes and other regulations. 

Why not look at what people are paying in Minot, North Dakota?

Also, if you are factoring in exchange rates, that is adding another 25% LOL

 

That $5.69 in Blaine is $7.56 in our dollars.  It's $2.149 across boundary bay in litres which is $8.13 compared to that $7.56 gallon.  

Diesel is $2.459litre/$9.31gallon. My son was telling me he heard rumours that some trucking companies haven't been moving, or have dialed back the amount of trucks on the road.  

It costs a lot of money to drive out there right now.