Just When You Think Biden Can’t Make Any Amount… Demand Oil Mining Companies Increase Output – Boost Thanks to That?
Guest “Bring it on Brandon!” by David Middleton
Published June 15
Biden threatens oil companies with ’emergency powers’ if they don’t boost supply amid soaring inflation
Biden says oil companies are making ‘historically high’ profitsBiden’s statement blamed oil companies for operating “historically high margins” even as Americans experienced soaring gas prices. Biden has recently faced criticism for lack of executive action aimed at curbing inflation.
“There is no doubt that Vladimir Putin is primarily responsible for the intense financial pain the American people and their families are suffering,” Biden wrote. “But in the wake of the war sending gasoline prices up more than $1.70 a gallon, historically high refinery margins are exacerbating that pain.”
“Your companies and others have the opportunity to take immediate actions to increase the supply of gasoline, diesel and other refined products you are producing,” he continued. “My administration stands ready to use all reasonable and appropriate tools of the Federal Government and emergency authorities to increase refinery capacity and output in the near term, and at the same time while ensuring that every area of this country is appropriately supplied.”
[…]
Everything this idiot has done since occupying the White House has made it more difficult for oil and gas companies to explore for oil and gas, lease space, drill wells and produce, transport and refine. petroleum products. And does he have the courage to ask for an increase in production?
Instead of writing fancy letters, he should probably check with the Energy Information Administration (EIA).
JUNE 10, 2022
EIA expects high refinery margins to contribute to increased fuel output this summerIn our June 2022 Short-term energy outlook (STEO), we forecast that the United States use oil refinery will be relatively high this summer as the wholesale prices of petroleum products such as diesel and gasoline rise sharply relative to the price of crude oil used to produce them.
The price difference between the crude oil price and the wholesale price of refined petroleum products reflects the value of refined crude oil. This divergence, known as the crack spread, can indicate profit and fine tuning. The rift spread for both diesel and gasoline increased in the first few months of 2022.
Gasoline and diesel prices and spread prices are much higher than historical averages due to a number of factors including:
•Low inventories for both US and global petroleum products
•Fuel demand rises to near pre-pandemic levels
•Refinery output is relatively low compared to pre-pandemic levels
•Reducing exports of petroleum products from Russia
In response to these high prices, we expect that refinery utilization will reach a monthly average of 96% twice this summer, close to the upper limit of what refineries offer. Oil can maintain consistently. We expect refinery utilization to average 96% in June, 94% in July and 96% in August.
We estimate US refinery inputs will average 16.7 million bpd in Q2 and Q3 2022. This average is lower than the annual refinery input average. 2019 was 17.3 million bpd despite high capacity utilization due to reduced refinery capacity since early 2020. US refinery capacity has dropped by nearly 1.0 million bpd since the start of 2020 as several refineries have closed or convert.
We expect wholesale gasoline and diesel prices to start falling in the third quarter of 2022, as refinery output increases. Despite our bearish forecast, we expect that wholesale fuel prices will remain higher than previous years throughout the summer, based on higher crude oil prices as well as the continued impact of global inventories. short. Low international inventories are likely to face further tightening in response to Europe’s recently announced Russian energy import ban.
Main Contributors: Kevin Hack
Back in Shamdemicdemand for petroleum and refined products has declined. This causes prices to fall, causing a sharp decrease in output. It also resulted in the closure of 6 refineries.
The number of operational refineries in the United States (excluding U.S. territories), including both active and idle refineries, was 129 at the beginning of 2021, down from 135 in early 2020.
In 2019, the 335,000 b/cd Philadelphia Energy Solutions (PES) refinery in Philadelphia, Pennsylvania, experienced a major event oil refinery incident resulted in the closure of the refinery. As the establishment’s permanent closure is still pending as of January 1, 2020, the facility is listed as inactive for 2020. Refinery capacity report. As of January 1, 2021, the refinery is considered closed and not included in the 2021 report.
Supplement closing oil refinery in 2021 Refinery capacity report largely reflects the impact of COVID-19 on the US refining sector (Figure 2). In 2020, the pandemic has contributed to significantly reduced demand for motor fuels and refined petroleum products, which pressures refinery margins and creates market conditions more challenges for refinery operators. Challenging market conditions, growing market interest in renewable diesel production, and plans to downsize or reconfigure pre-existing refineries all contribute to the closure of several refineries in 2020. We have removed the following refineries from total U.S. operable capacity at their notice. close the door:
•Western Refining Refinery in Gallup, New Mexico: 27,000 barrels/cd
•Tesoro (Marathon) Refinery in Martinez, California: 161,000 b/cd
•Dakota Prairie Refinery in Dickinson, North Dakota: 19,000 barrels/cd
•HollyFrontier Refinery in Cheyenne, Wyoming: 48,000 barrels/cd
•Shell Refinery in Convent, Louisiana: 211,146 b/cd
Some refineries are also converted to “renewable” diesel production:
Renewable diesel oil increasingly used to meet California’s Low Carbon Fuel Standard (LCFS), Oregon Clean Fuel Program (CFP) and EPA RFS. Blender tax credit and government subsidies related to California’s LCFS and, to a lesser extent, Oregon’s CFP that has encouraged a number of former refineries — such as Marathon’s Martinez, California Refinery and Phillips 66 . Rodeo Renewal Project in San Francisco, California — to convert their refineries into renewable diesel facilities. These projects, along with several others, will almost triple Current renewable diesel production capacity is 77,000 b/d (b/d) by the end of 2023. According to data gathered from various trade press sources, the United States will have online 67,000 b/d of capacity. new renewable diesel capacity. in 2022 and another 72,000 by the end of 2023. These estimates are based on projects currently under construction. Construction has yet to begin on a number of projects that could also come online this time around, although we assume they won’t come online before 2024.
No amount of Brandon can get those closed refineries back up and running. No new crude oil refineries have been built in the US since 1977. However, EIA forecasts that high crack spread will cause refinery utilization rates to rise from current levels of ~91% up ~96% this summer, resulting in the crack spreading back to roughly where it was before Shamdemic.
Unfortunately for Brandon, this probably won’t happen before November.
This only happens in… ExxonMobil shoots back (H/T CTM)
ExxonMobil’s Statement on President Biden’s Letter to the Oil Industry
June 15, 2022 02:46 PM Eastern Daylight Time
IRVING, Texas– (BUSINESS LINE) –ExxonMobil released the following statement today in response to a letter from President Biden.
We are in regular contact with the administration to keep the President and his staff updated on how ExxonMobil has invested more than any other company in developing the United States’ oil and gas supply. Ky. This includes investments in the US of more than $50 billion over the past 5 years, resulting in a nearly 50% increase in our oil production in the US during this period.
Globally, we’ve invested twice as much as we’ve earned in the last 5 years – $118 billion in new oil and gas supplies versus a net income of $55 billion. This is a reflection of the company’s long-term growth strategy and commitment to continuously investing to meet societal demand for our products.
For US refining capacity specifically, we’ve invested through the recession to increase our refining capacity to process US light crude by about 250,000 barrels per day – the equivalent of adding one more refinery. New medium-sized oil refinery. We continue to invest even during the pandemic, when we lost more than 20 billion USD and had to borrow more than 30 billion USD to maintain investment to increase capacity ready for demand after the pandemic.
In the short term, the U.S. government could enact measures commonly used in the event of hurricane emergencies or other supply disruptions — such as waivers of the Jones Act provisions and certain other notices. fuel specifications to increase supply. In the long run, the government can promote investment through clear and consistent policy that supports the development of U.S. resources, such as regular and predictable rental salesas well as sound regulatory approvals and support for infrastructure such as pipelines.
About ExxonMobil
ExxonMobil, one of the largest publicly traded international petrochemicals and energy companies, creates solutions that improve quality of life and meet evolving societal needs.
The group’s core businesses – Upstream Solutions, Product Solutions and Low Carbon Solutions – provide products that support modern life, including energy, chemicals, lubricants and lower emission technologies. ExxonMobil holds an industry-leading portfolio of resources and is one of the largest integrated fuels, lubricants and chemicals companies in the world. To learn more, visit exxonmobil.com and Energy element.
Follow us at Twitter and LinkedIn.
Contact
Media relations
972-940-6007
Related
