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Who's ready for things to get whacky in the oil market?
>Two largest US refineries shutting down (Motiva in Port Arthur, Exxon in Baytown)
>Estimates of US refining production loss due to hurricane Harvey range from 1-4 million bbl/day
>Refining bottleneck expected to drive down crude prices as industry oversupply gets worse
>European refiners already arranging oil tanker crossings to sell to US
>Tanker earnings have risen from $3500/day to $20000/day already
>US gasoline contract for delivery into New York Harbor has risen from $1.58/gal to $1.90/gal
>Mexico and Brazil, major consumers of US petrol products will be looking for new suppliers
>Gasoline futures surging 13%
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>>3276820
>tfw Canada's back in the game, baby
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>>3276820
Venezuela's been trying to sell their oil for months, who knows what can happen.
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>>3276877
Venezuela is fucked. It's likely current oversupply, plus the reduction in refining capability will push crude prices into the 30s or 20s until refining can ramp back up.
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>>3276910
That actually could be a factor that drives crude prices back up. Venezuela's state run oil company could default as early as October, which would take their supply out of the market. In the scenario where Venezuela is cut out and Iran gets sanctioned, we could see a huge amount of supply cut out which would keep crude prices up. At the same time, there's a huge amount of crude in storage that would have to be factored into all that.
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>>3276820
Looking at oil in general, it's interesting to see the middle east bleeding investment into the US. Getting oil out of the ground requires huge amounts of financing that takes a long time to produce a return. Investors that provide this financing are looking at US oil as a much more stable investment than the middle east. It also helps that US fracking projects have a lower startup cost and shorter ROI.
Even the Saudis are seeing the light. ExxonMobil and Saudi Basic Industries are teaming up for a multibillion dollar petrochemical project in the gulf coast. The Saudis also invested around 20 billion in the Blackstone infrastructure fund.
I guess now that the Saudi's failed miserably to take out US shale producers, their new strategy is to cash in on shale.
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