GOODBYE FOREIGN OIL DEPENDENCE!!

13 minutes ago, Enthalpic said:

Alberta (Canada) is working hard on its export problems; if we could export it faster the US would buy it faster...

Shale oil wells have a short lifespan and new development will stop when people start buying more cheap Canadian oil. Laugh at the price differential now and cry later when US oil companies start hurting.

was someone laughing? 

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2 minutes ago, Rodent said:

was someone laughing? 

Well the price we (Alberta) sell it at is a joke. :)

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1 minute ago, Enthalpic said:

Well the price we (Alberta) sell it at is a joke. :)

True, that. Now go build some flippin pipelines!!! 😊

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Doesn't the US consume 20 or so million barrels a day of oil while producing 11 plus. How does that make use guys oil independent?

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4 minutes ago, MrGreat said:

Doesn't the US consume 20 or so million barrels a day of oil while producing 11 plus. How does that make use guys oil independent?

Fine. So we're not independent. I was just excited for our net export status. Sheesh. Let me just say then, Mr. Stickler, that we are... more independent than dependent.

I'm going to take the high road and ignore the "use guys" dig. 

 

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19 minutes ago, Rodent said:

Fine. So we're not independent. I was just excited for our net export status. Sheesh. Let me just say then, Mr. Stickler, that we are... more independent than dependent.

I'm going to take the high road and ignore the "use guys" dig. 

 

I believe the proper terminology is independenter. 

Prolly better to check with @Marina Schwarz though, as the local linguister.

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1 hour ago, wimposak said:

eat a bag of wigwams

Readers Note:  What this responsive post demonstrates is what I had suspected:  "wimposak" is an artificial-intelligence bot, being handled by a hacker, or trouble-maker, bent on disrupting the Oilprice forum for purposes that remain unknown.  Until the Moderators ban his posts, readers are advised to ignore this AI Bot. 

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2 hours ago, Tom Kirkman said:

I believe the proper terminology is independenter. 

Prolly better to check with @Marina Schwarz though, as the local linguister.

The U.S. is now independenter in the oil department than before. Sounds perfectly fine to me, yes. We have another new word!

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6 hours ago, Jan van Eck said:

Readers Note:  What this responsive post demonstrates is what I had suspected:  "wimposak" is an artificial-intelligence bot, being handled by a hacker, or trouble-maker, bent on disrupting the Oilprice forum for purposes that remain unknown.  Until the Moderators ban his posts, readers are advised to ignore this AI Bot. 

justice has been swiftly dealt  

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The US is worlds largest refiner in the world. The US refiners wants crude oil imports because they make alot of $$$ off buying cheaper world crude imports. Especially Canada's bitumen which trades at a discounted (differential) price to WTI. Imports will never stop into the US because of there large refining capacity and petrochemical business. 

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Being a net exporter is a temporary situation, so don't get excited. Many of the shale players are still losing money on new wells and the brief uptick in oil price this summer didn't last long enough. So don't believe all the published numbers on break even costs for shale wells. Breaking even still means you are losing money because it doesn't always account for older debt costs and overhead (DD&A). The shale players often use a gimmick called non-GAAP accounting to make unconventional wells look better than they really are.

Also note that "oil" is now calculated as crude + condensate + liquids + refined products, not just conventional crude. All HC liquids are not the same and a lot depends on how you account for imported crude and product stocks and refinery gains.

If you have a real reservoir, you don't need expensive horizontal wells to produce it. But the industry isn't finding enough new oil fields, so they are tapping the crappy source rocks. When Ghawar, Cantarell, Burgan and other super fields start dying and the free money here ends, it's going to get very ugly.

 

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33 minutes ago, RTMac0028 said:

Being a net exporter is a temporary situation, so don't get excited. Many of the shale players are still losing money on new wells and the brief uptick in oil price this summer didn't last long enough. So don't believe all the published numbers on break even costs for shale wells. Breaking even still means you are losing money because it doesn't always account for older debt costs and overhead (DD&A). The shale players often use a gimmick called non-GAAP accounting to make unconventional wells look better than they really are.

Also note that "oil" is now calculated as crude + condensate + liquids + refined products, not just conventional crude. All HC liquids are not the same and a lot depends on how you account for imported crude and product stocks and refinery gains.

If you have a real reservoir, you don't need expensive horizontal wells to produce it. But the industry isn't finding enough new oil fields, so they are tapping the crappy source rocks. When Ghawar, Cantarell, Burgan and other super fields start dying and the free money here ends, it's going to get very ugly.

 

https://www.wsj.com/articles/big-fracking-profits-at-50-a-barrel-dont-bet-on-it-1543919401

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On 12/6/2018 at 4:34 PM, Rodent said:

US turns to net oil exporter, says EIA.

Two words: Boo. Ya. 

US Crude shipments last week = 3.2 million bpd

 

On 12/6/2018 at 4:34 PM, Rodent said:

US turns to net oil exporter, says EIA.

Two words: Boo. Ya. 

US Crude shipments last week = 3.2 million bpd

The numbers don't match, how do you consume 19.96 MBbl/day in 2017 and are now being considered a net exporter. The record has just been set at +/- 12MBbl/day and this is ONLY Novembers numbers. 7.3 Billion Bbls consumed in 2017. Net oil exporter temporary for November, but the USA have a long way to go and prove the can be a sustainable Net Exporter. Were playing with words anyway the USA import today and will continue to import for a long time, hype and spin, loose lips sinks oil tankers.......

 

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On 12/7/2018 at 1:53 AM, MrGreat said:

Doesn't the US consume 20 or so million barrels a day of oil while producing 11 plus. How does that make use guys oil independent?

EXACTAMUNDOOOOOOOO - The right wording would be Proxy-Independent, those tankers in Galveston are delivering full and leaving empty.

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On 12/6/2018 at 7:42 PM, Jan van Eck said:

I am going to ask you nicely to think through the tenor of your comments before you hit that Post button.  They have this disconcerting tendency to come across as rude and aggressive, and I feel confident you did not intend them that way.  Nonetheless, "print" is a medium that cannot capture tonal inflection, and thus is best approached cautiously, and humbly.  Otherwise, you come across as being some high-level Al bot.  Cheers. 

LOL where does Al-bot come from and mean, I'm imagining all kinds of things??

Screen Shot 2018-12-08 at 05.36.20.png

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image.png.5c4e6450c85fb6629977f66ff7b94168.png

 Hi everyone, trying to understand how the the U.S. can be a net exporter with 12 MM BBL/Day production and 19+ MM BBL/Day consumption.  Imports of refined products?

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On 12/6/2018 at 7:39 PM, Rodent said:

was someone laughing? 

US oil companies will only hurt if we elect more leftists. Canada is only hurting because they already have Trudeau and company. Another Obama would help squelch cheap energy in America. Hopefully, Canada is turning to the right again. 

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2 hours ago, ronwagn said:

US oil companies will only hurt if we elect more leftists. Canada is only hurting because they already have Trudeau and company. Another Obama would help squelch cheap energy in America. Hopefully, Canada is turning to the right again. 

Left or Right you would have the same result, Trump or Obama this is big business at play, problem is Trump is big business not president 

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(edited)

On ‎12‎/‎8‎/‎2018 at 9:41 AM, MaxNix said:

image.png.5c4e6450c85fb6629977f66ff7b94168.png

 Hi everyone, trying to understand how the the U.S. can be a net exporter with 12 MM BBL/Day production and 19+ MM BBL/Day consumption.  Imports of refined products?

Robert Rapier does a good job explaining here

https://www.forbes.com/sites/rrapier/2018/12/09/no-the-u-s-is-not-a-net-exporter-of-crude-oil/#4afb92d54ac1

Edited by Refman
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(edited)

Based on the most recent four week running average EIA data, the US was dependent on net crude oil imports for 30% of the Crude + Condensate (C+C) inputs into US refineries, and looking at gross imports (excluding exports of very light crude and condensate, which are  probably in surplus around the world), 44% of the inputs into US refineries were from imported crude oil.  Given that US refineries have probably hit the limit on how much very light crude and condensate that they can take (given their output requirements), the US is effectively dependent on imported crude oil for almost half of the C+C inputs into US refineries (see article below from April.) 

Regarding the recent very large increase in US C+C production, I think that most analysts are overlooking the magnitude of the decline in existing production, as they assume that the US will produce 10 million bpd plus of C+C for the indefinite future.   

Of course, there are two decline factors at work:  (1)  As production increases, the volumetric decline from existing wells increases, and (2)  As the percentage of total C+C production coming from tight/shale sources increases, the underling rate of decline from existing wells also increases. 
 
In my opinion, a plausible estimate is that at current production levels the US needs to put on line about 2.5 million bpd of new C+C production every year, just to maintain current production. Or, in round numbers, the US needs to replace the roughly current production of Saudi Arabia about every four years, i.e., we need to put on line the productive equivalent of Saudi Arabia three times over between now and 2030, in order to maintain current US production.   
 
And of course, a very high percentage of US C+C production consist of very light crude and condensate. 
 
Based on September, 2018 EIA data, about 42% of US Lower 48 C+C production exceeded the maximum API gravity for WTI crude oil, 42 degrees API.  Globally,  in my opinion an effective peak (an "Undulating plateau") in actual global crude oil production (45 API gravity and lower) has been obscured by the continued increase in natural gas production and associated liquids--condensate and natural gas liquids. 
 
As noted above, based on the most recent four week running average EIA weekly data, US refineries were still dependent on net crude oil imports for 30% of the C+C inputs into US refineries, as more and more major net oil exporters quickly approach or have already hit zero net oil exports, e.g., Mexico and Denmark respectively--and as the Chindia region continues to consume an increasing percentage of Global Net Exports of oil (GNE, the combined net exports from the 2005 major net oil exporters).  
 
From 2005 to 2017, I estimate that the volume of GNE available to importers other than China & India, what I call Available Net Exports (ANE),  fell from 40 million bpd to 32 million bpd (total petroleum liquids, BP + EIA data).  And given an ongoing--and inevitable--decline in GNE, it's a mathematical certainty that unless the Chindia region cuts their net imports of oil at the same rate as, or at a faster rate than the rate of decline in GNE, the rate of decline in ANE will exceed the rate of decline in GNE and the rate of decline in ANE will accelerate with time.  
 
In fact, that is what we saw from 2005 to 2017, as ANE fell at about 2%/year from 2005 to 2017, versus basically flat GNE. 
 
Regarding the composition of US C+C:
 
Super-light crude is flooding the US oil market, and there's little demand to meet it.  

All of the industry's growth in the US over the last year was thanks to crude with a gravity above 40 on the American Petroleum Institute's scale, which measures the weight of a petroleum liquid compared to water, according to analysts at Morgan Stanley.

That's a problem for domestic shale explorers. Most refineries in the US are designed for heavier crude grades, around 32 API. And refiners are running out of room to process super-light shale without seeing losses. 

"Domestic refiners cannot take much more of this and are close to hitting the 'shale wall,'" the analysts said.

Edited by Jeffrey Brown
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On 12/7/2018 at 9:23 AM, MrGreat said:

Doesn't the US consume 20 or so million barrels a day of oil while producing 11 plus. How does that make use guys oil independent?

 

On 12/8/2018 at 9:11 PM, MaxNix said:

image.png.5c4e6450c85fb6629977f66ff7b94168.png

 Hi everyone, trying to understand how the the U.S. can be a net exporter with 12 MM BBL/Day production and 19+ MM BBL/Day consumption.  Imports of refined products?

USA produces 1 NBPD ethanol, 1MBPD refinery gains, 5-5.3MBPD NGL (Natural gas liquids containing propane, butane, ethane used for heating, gasoline blending and plastics). This comes to about 7-7.3MBPD. In addition, 11.7MBPD crude oil production will make the total production as 18.7-19MBPD. The liquid fuel consumption is 20.7MBPD. So, about net 1.7-2MBPD is imports, mostly from Canada.

USA was a net exporter for a temporary period (1-2weeks) as the older inventory which was accumulated due to some excess imports or consumption fluctuations have been released in excess of 2MBPD on average during the said time period, thus appearing like net exporter

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On 12/8/2018 at 9:41 AM, MaxNix said:

image.png.5c4e6450c85fb6629977f66ff7b94168.png

 Hi everyone, trying to understand how the the U.S. can be a net exporter with 12 MM BBL/Day production and 19+ MM BBL/Day consumption.  Imports of refined products?

 

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(edited)

I think the big misconception on this topic as a whole, is that the US no longer imports crude, or could be capable of not importing crude. Problem being that we have a surplus of light sweet crude from shale, but unfortunately we spent the last couple of decades gearing up to process heavy sours, so there is a mismatch.

Edited by Refman
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(edited)

In addition to my comment above. The irony is that when the export ban was in place, US refiners were starting to build more units capable of processing US shale oil, because of the huge discount they were getting on Domestic crude. As soon as the export ban was scrapped, the discount disappeared and all that oil is now being exported instead of finding a home here. So if we really wanted to be independent of exports we should have kept the ban in place. 

Edited by Refman

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