Boiler doesn't know much, but he does have a reasonably good handle on the oil industry. There is actually a shortage of sour crude within the United States, since many refineries were built to operate on sour crude from places such as Venezuela. Most of our new fracking crude is sweet. The sour high sulfur crude that DD refers to is landlocked with no chance to get to market.............economically. Build a pipeline, and this crude will sell for a far higher price..................since it now costs $30 per barrel to reach "the market".
Boiler spent 25 years working for oil companies on the petrochemical side, and his grandfather and father had 90 combined years on the refining, exploration, and production side of the business. These men were much smarter than I, yet I was fortunate enough to gain a small portion of their wisdom.
Boiler is visiting his best friend tomorrow in Houston. You might guess with Purdue Pete does for a living.
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Originally posted by: DonDiego
Just a minor note suggesting what may be coming down the pike for the over-extended producers of low-grade crude oil, . . . like all the shale oil companies, and most especially those who produce a particular high-sulfur oil called North Dakota Sour.
"Oil is so plentiful and cheap in the U.S. that at least one buyer says it would need to be paid to take a certain type of low-quality crude.
Flint Hills Resources LLC, the refining arm of billionaire brothers Charles and David Koch’s industrial empire, said it would pay -$0.50 (that is minus-50-cents - DD) a barrel Friday for North Dakota Sour, a high-sulfur grade of crude, according to a list price posted on its website. That’s down from $13.50 a barrel a year ago and $47.60 in January 2014."
Ref: Bloomberg - A Crude Oil Worth Les Than Nothing
And whichever bank loaned these producers money, . . . had better increase their loan reserves pronto !
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