Thread: Oil Slick Stuff

Notice that East Coast refineries are buying Brent Crude oil. This will drive the price of Gas in the USA higher in the near future. Why would they Buy Brent Crude?
Eight Reasons Gas Will Hit $5 This Year

Posted: February 24, 2012 at 6:45 am

3. Refiners Likely to Raise Prices
Most of the oil refined on the east coast of the U.S. is Brent crude, a type of oil produced from the North Sea. The price of Brent — more than $124 a barrel — is almost $16 higher than the price of West Texas Intermediate (WTI) crude, the amount most people read about in the media. But because Brent has replaced WTI as the global price benchmark, U.S. refiners set prices for gasoline and other products as if Brent were the only grade of crude used. That allows refiners with access to cheaper WTI to make larger profits.

Read more: Eight Reasons Gas Will Hit $5 This Year - 24/7 Wall St. Eight Reasons Gas Will Hit $5 This Year - 24/7 Wall St.

Don't forget that this is the time of the year that the refineries are starting to boot up for the summer formulas and there are almost 100 different formulas to make for different states and regions of the country, for all grades of fuel. This adds greatly to the costs of the fuel.

Regular 10% Moonshine gas averaging $3.59 a gallon in Boiled Peanut. gaspump2.gif

Odd that the Brent cost is now the global standard. The North Sea may have oil reserves but it's not like it's the largest source. Also, it's considered a higher-risk venue for oil; there's a reason why the Germans say "Nordsee ist Mordsee." (The North Sea is the Sea of Death) - the weather patterns can be singularly nasty

Originally Posted by Silverbird

Odd that the Brent cost is now the global standard. The North Sea may have oil reserves but it's not like it's the largest source. Also, it's considered a higher-risk venue for oil; there's a reason why the Germans say "Nordsee ist Mordsee." (The North Sea is the Sea of Death) - the weather patterns can be singularly nasty

With no logical reason I take it was a political move?

Originally Posted by nnuut

With no logical reason I take it was a political move?

Probably because they can base gas prices on Brent ($125) but buy WTI ($108) and bank the profits...

The're twisting the knife today!

Crude Oil - Electronic (NYMEX) Apr 2012, CLJ2 Future Quote - (NMN) CLJ2, Crude Oil - Electronic (NYMEX) Apr 2012 Future Priceoil.jpg

The way that oil is going up has nothing to do with Iran or demand. Something illegal is going on and congress will turn a blind eye because they are all making money on this. How is that for a conspiracy theory

That's a good one!
Just bad policy.

Feb. 24, 2012, 2:38 p.m. EST
USGS: Up to 2 billion bbls of oil in North Slope
USGS: Up to 2 billion bbls of oil in North Slope - MarketWatch

I don't know about the refineries closing being an issue since I just heard from some "experts" on TV that oil demand is at its lowest point since 1997. It sounds like it is not a matter of supply and demand anymore here in the U.S. It's a matter of who is willing to pay more overseas. The question is, do we want gov't intervention to stop the free market process and require the oil companies to sell to us first? Interesting problem.

This is what has been passed around recently as a reason, and it's true that the administration has restricted drilling in some major federal gov't controlled areas, but drilling on state land and private land has increased since they can't stop that.



Bottom line, the demand is down, supply is not. So is it just a matter of geo-political events and speculators keeping prices up? I don't know.