214 - Where are fuel prices heading?

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WTI higher or lower than $73, Brent higher or lower than $77?

Ellen-Higher

Ryan-says Lower (but really thinks higher)

Biden adviser calls investor refusal to ramp up shale drilling ‘un-American’

https://thehill.com/policy/energy-environment/3771025-biden-adviser-calls-investor-refusal-to-ramp-up-shale-drilling-un-american/

“I think that the idea that financiers would tell companies in the United States not to increase production and to buy back shares and increase dividends when the profits are at all-time highs is outrageous,” Hochstein told the British newspaper.“It is not only un-American, it is so unfair to the American public,” he added. “You want to pay dividends, pay dividends. You want to pay shareholders, pay shareholders. You want to get bonuses, do that, too. You could do all of that and still invest more. We are asking you to increase production and seize the moment.”

Real issues shale drillers face are higher costs for materials, products, labor, etc. unavailability of necessary things like steel parts. Is inflation un-American?

Biden admin beating up on Exxon, Trump admin also beat up on oil companies. Depend on public ignorance.

Saudi energy minister sees no clear results yet from Russia price caphttps://www.reuters.com/business/energy/saudi-energy-min-all-opec-members-participate-decision-making-2022-12-11/- curious timing between Russian oil sanctions and end of Zero-Covid policies in China. Is there a correlation between more Russian oil becoming available and demand rising in China- is is a national security issue for China to buy too much Russian oil? Probably not. National security is protecting CCP- Saudi oil minister is looking with caution at global economy following implementation of sanctions and price cap policy.- Also, "The impact on China's economy from easing Covid restrictions still "needs time",Federal data: Kansas oil spill biggest in Keystone historyhttps://apnews.com/article/oil-spills-business-texas-kansas-us-environmental-protection-agency-eda391fc0924b34a08ff840615a7bc58Rush to electric vehicles may be an expensive mistake, say climate strategistshttps://www.cbc.ca/news/business/ev-transition-column-don-pittis-1.6667698Special Guest Patrick DeHaan, aka @GasBuddyGuy, Head of Petroleum Analysis at GasBuddyWhat's going on with diesel prices? - Has been the laggard this year. - Myriad of challenges this year combined with Russia/Ukraine challenges have made it problematic- Diesel prices soared in October when inventories were low, finally under $5/gallon now.- Diesel prices have eclipsed drop in gasoline prices per gallon- Both on the supply side and the demand side- Refineries had extensive turnaround this autumn. Mid-Sept through Mid-Nov when refineries do maintenance.- Coincided with Europe trying to build diesel storage, made for a tight situation though not as bad as the media played it.- Refinery utilization has been very high - unseasonably high numbers.- 25 days of distillate has jumped to 31 days meaning now we have $4.89/gallon- Cold spell coming up in US. CPC predicting colder than normal weather - pressure on heating oil. As a result of anticipated cold weather, wholesale price of diesel is going up. That will justify refiners keeping utilization high. Will help keep gasoline production up.- Refineries will continue to have above normal utilization but only in low 90s, probably- Europe has lost 6% of its refining capacity due to Covid. US only lost 5%. Market for U.S. products in Europe is good. - "The door is wide open for US refiners to fill that void."- Northeast has a population 10 times that of the Rockies but has the same refining capacity as the Rockies.- This why US needs more refining capacity. There is a huge need for refining capacity. - Closure of Philadelphia refinery was huge. It produced 1/3 of a million barrels a day. - Governments trying to incentivize bio-diesel. Tremendous incentives from government to convert but capacity is lower than traditional petroleum products. Conversions are happening at a bad time. Refining hasn't been lucrative until this year.Check out https://open.substack.com/pub/gasbuddyguy/p/gas-price-decline-hits-five-weeks?

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