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Running out of room to store oil
beneteau
Member Posts: 8,552 ✭✭✭
The Associated Press - By By JONATHAN FAHEY - AP Energy Writer
19 hours ago
NEW YORK (AP) - The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months.
For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country's main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week.
If this keeps up, storage tanks could approach their operational limits, known in the industry as "tank tops," by mid-April and send the price of crude - and probably gasoline, too - plummeting.
"The fact of the matter is we are running out of storage capacity in the U.S.," Ed Morse, head of commodities research at Citibank, said at a recent symposium at the Council on Foreign Relations in New York.
Morse has suggested oil could fall all the way to $20 a barrel from the current $50. At that rock-bottom price, oil companies, faced with mounting losses, would stop pumping oil until the glut eased. Gasoline prices would fall along with crude, though lower refinery production, because of seasonal factors and unexpected outages, could prevent a sharp decline.
The national average price of gasoline is $2.44 a gallon. That's $1.02 cheaper than last year at this time, but up 37 cents over the past month.
Other analysts agree that crude is poised to fall sharply - if not all the way to $20 - because it continues to flood into storage for a number of reasons:
- U.S. oil production continues to rise. Companies are cutting back on new drilling, but that won't reduce supplies until later this year.
19 hours ago
NEW YORK (AP) - The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months.
For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially at the country's main trading hub in Cushing, Oklahoma, pushing U.S. supplies to their highest point in at least 80 years, the Energy Department reported last week.
If this keeps up, storage tanks could approach their operational limits, known in the industry as "tank tops," by mid-April and send the price of crude - and probably gasoline, too - plummeting.
"The fact of the matter is we are running out of storage capacity in the U.S.," Ed Morse, head of commodities research at Citibank, said at a recent symposium at the Council on Foreign Relations in New York.
Morse has suggested oil could fall all the way to $20 a barrel from the current $50. At that rock-bottom price, oil companies, faced with mounting losses, would stop pumping oil until the glut eased. Gasoline prices would fall along with crude, though lower refinery production, because of seasonal factors and unexpected outages, could prevent a sharp decline.
The national average price of gasoline is $2.44 a gallon. That's $1.02 cheaper than last year at this time, but up 37 cents over the past month.
Other analysts agree that crude is poised to fall sharply - if not all the way to $20 - because it continues to flood into storage for a number of reasons:
- U.S. oil production continues to rise. Companies are cutting back on new drilling, but that won't reduce supplies until later this year.
Comments
Does this mean the federal oil reserves are at full capacity now?
During the fuel shortage back in the mid 80's (?) the feds released oil from the Fed reserves or was reported they did to ease the fuel shortages back then. [?]
http://en.wikipedia.org/wiki/Strategic_Petroleum_Reserve_(United_States)
If you can believe Wikipedia, the SPR is 95% full right now.
This is a military reserve by design, as at capacity it would only handle U.S. oil needs for 1-1/2 months or so.
Brad Steele
So expand the strategic reserve in capacity and purpose. Add the purpose of national economic resource security.
Why?
Is this the roll of the Federal Government? Do we really want to give the Federal Government the power to control and manipulate the price of oil?
Don't really see an upside here.
Keeping the military functioning in a time of crisis is the proper roll of the Federal Government and a proper use of Federal Funds.
Stockpiling consumer goods is not, IMO, a proper use of Federal Funds.
Brad Steele
quote:Originally posted by ChrisInTempe
So expand the strategic reserve in capacity and purpose. Add the purpose of national economic resource security.
Why?
Is this the roll of the Federal Government? Do we really want to give the Federal Government the power to control and manipulate the price of oil?
Don't really see an upside here.
Keeping the military functioning in a time of crisis is the proper roll of the Federal Government and a proper use of Federal Funds.
Stockpiling consumer goods is not, IMO, a proper use of Federal Funds.
Well, if the US would actually convert to an oil standard currency it might make sense in that respect.
And fiery auto crashes
Some will die in hot pursuit
While sifting through my ashes
Some will fall in love with life
And drink it from a fountain
That is pouring like an avalanche
Coming down the mountain
To see how big it is,, with photos:
http://www.energyindustryphotos.com/largest_oil_storage_facility_in.htm
quote:Originally posted by Don McManus
quote:Originally posted by ChrisInTempe
So expand the strategic reserve in capacity and purpose. Add the purpose of national economic resource security.
Why?
Is this the roll of the Federal Government? Do we really want to give the Federal Government the power to control and manipulate the price of oil?
Don't really see an upside here.
Keeping the military functioning in a time of crisis is the proper roll of the Federal Government and a proper use of Federal Funds.
Stockpiling consumer goods is not, IMO, a proper use of Federal Funds.
Well, if the US would actually convert to an oil standard currency it might make sense in that respect.
Trying to picture what a cash register would look like.[:)]
Brad Steele
quote:Originally posted by Mr. Perfect
quote:Originally posted by Don McManus
quote:Originally posted by ChrisInTempe
So expand the strategic reserve in capacity and purpose. Add the purpose of national economic resource security.
Why?
Is this the roll of the Federal Government? Do we really want to give the Federal Government the power to control and manipulate the price of oil?
Don't really see an upside here.
Keeping the military functioning in a time of crisis is the proper roll of the Federal Government and a proper use of Federal Funds.
Stockpiling consumer goods is not, IMO, a proper use of Federal Funds.
Well, if the US would actually convert to an oil standard currency it might make sense in that respect.
Trying to picture what a cash register would look like.[:)]
Oil standard = Oil backed. And so the circulated currency would remain (largely) as is, but would instead retain value and have merit.
And fiery auto crashes
Some will die in hot pursuit
While sifting through my ashes
Some will fall in love with life
And drink it from a fountain
That is pouring like an avalanche
Coming down the mountain