Crude quality matters?

[Tomasz + 1,608]

If you listen to experts like Art Berman or Anas Alhajji, they say that in the case of shale oil, not only the quantity but also the quality matters.

http://l2capital.com.br/en/podcast/podcast-27-anas-alhajji-oil/

 As you probably know, shale oil is light sweet crude and both experts say there is slowly too much of it in relation to heavy oil.

According to experts, this is the reason for the export of light oil from the US and import of 6-7 million barrels of heavy oil. For example, in December, the US imported almost 20 millions barrels heavy oil from Russia, which I put only as a curiosity.

Generally they think  there is a lack of refinery capacity to process light oil in the USA. Capacity is abroad but the problem with shale oil is that it is difficult to economically produce diesel and other heavy products for which demand is growing compared to gasoline. Anas Alhaji predicts a crisis when the world will not be able to process more and more sweet  light oil, so the differential between Brent and WTI oil will increase significantly, and US producers will have to cut production.

Due to the fact that in the production of oil other than shale after 2014 investments are significantly stopped, both experts predict an increase in oil prices starting from 2021.

What do you think about this?

Edited February 14, 2020 by Tomasz

[Gerry Maddoux + 3,627]

There's plenty of heavy oil to mix in with the LTO in refineries. 

Canada oil sands oil is a good example. They like the US. They're close.

[footeab@yahoo.com + 2,187]

1 hour ago, Tomasz said:

If you listen to experts like Art Berman or Anas Alhajji,

 As you probably know, shale oil is light sweet crude and both experts

Amazing how all the "experts" are all consultants trying to drive up business instead of chemical engineers working at refining plant optimization...  The plants existing are optimized for heavy, not sweet.  An entirely different optimization is what does one want from a $$$ perspective.... for that light sweet is optimum

Edited February 14, 2020 by footeab@yahoo.com

[0R0 + 6,251]

3 hours ago, footeab@yahoo.com said:

Amazing how all the "experts" are all consultants trying to drive up business instead of chemical engineers working at refining plant optimization...  The plants existing are optimized for heavy, not sweet.  An entirely different optimization is what does one want from a $$$ perspective.... for that light sweet is optimum

They are structured to produce light products from heavy inputs. They can restructure for light oil without heavy costs. The main cost is writing off the crackers and clean up processes to clean up heavy crudes. As you can see, so long as heavy crudes don't cost that much more, refiners will only update when their equipment wears out.