PEMEX cuts oil supplies to US by 15%

[Gunner70]

Mexico's national oil company annouced it is cutting crude oil supplies to US refiner Valero by 15%. Valero is one of the US's largest refiners of gasoline. Mexico is the third largest supplier of energy to the US after Canada #1 and Saudi Arabia #2.

 

[Gunner70]

The source of this information is todays Washington Post. The article goes on to compare today's oil production surplus vs demand (only 2%) vs to 20 years ago when the surplus was 15%. Implying that when PEMEX does something like a 15% cut the market reacts in a knee jerk way driving prices up. At the same time PEMEX cut supplies, India annouced a new inexpensive consumer car for its massive car hungry economy the NANO. The price for a bbl of oil reacted accordingly per the Post.

 

[unregistered]

 

[Saint Peter]

PMEX had overestimated the amount of goods in the ground and underestimated the amount of oil Mexico needs to make the wheels go round.

While this will do nothing but drive up the price of a barrel, the powers that be knew it would happen sooner or later.

Get a bicycle.

 

[Slowlane]

Mexico's national oil company annouced it is cutting crude oil supplies to US refiner Valero by 15%. Valero is one of the US's largest refiners of gasoline. Mexico is the third largest supplier of energy to the US after Canada #1 and Saudi Arabia #2.

There needs to be a lot more numbers to go with that before your info has any use.

 

[coastal-boy]

Addiction is a terrible disease. Those addicted only worry about how to get their next fix and can never think about how to get the monkey off of their back. All Republicans can think about is the continuation of using the same drug...let's drill for more...that is the answer. All the Democrats are doing is whining about how wrong the Republicans are. Again, no solution.

 

[unregistered]

 

[Franklin78]

Mexico's national oil company annouced it is cutting crude oil supplies to US refiner Valero by 15%. Valero is one of the US's largest refiners of gasoline. Mexico is the third largest supplier of energy to the US after Canada #1 and Saudi Arabia #2.

I do not drive anymore I walk or take the bus or trolley when i am in the city.

 

[coastal-boy]

Idealists are incorrigible. Someone once said if you throw an idealist out of Heaven he'll tell you how great it is in Hell.

I'm far from an idealist...more of a realist. Talk is cheap and I have yet heard of real solution to this dependency from either side. What we do know is that it won't be cheap. So how do you fix it? You can take the money and drill for more oil...keeping the addiction going...or you can take the money and invest it into potential solutions. Either way, we are 7 yrs away from realizing either outcome. Are you telling me there is enough money for both drilling and research? I don't see it. You remind me of Red Green...fixing his problems with duct tape.

 

[Ajax_Prime]

Mexico's production is down at least that much year on year...that is not "new" news to the market at all. And unless Mexico is declaring some sort of force majeure, Valero is being kept whole monetarily. That's sop for energy contracts.


*Edit*
Yeah, the Post is a little behind the times. This actually happened back on July 7th, a few weeks before the latest price collapse began. A little emphasis on the "guaranteed" amount below, and the fact that 50% of the gas output of this crude gets shipped back to Mexico.

Pemex Cuts Crude Supply to Shell, Valero Refineries (Update2)

By Andres R. Martinez

July 7 (Bloomberg) -- Petroleos Mexicanos, Mexico's state- owned oil company, reduced the amount of crude oil it supplies to Texas refineries operated by Royal Dutch Shell Plc and Valero Energy Corp. as falling production curbs exports.

The guaranteed amount of Mayan oil for a Deer Park, Texas, refinery jointly operated with Shell, Europe's biggest oil company, was cut by 15 percent, the Mexico City-based company said in a regulatory filing. Pemex also lowered oil supplies by 5.8 percent to the Port Arthur, Texas, refinery of Valero, the largest U.S. refiner.

``We have not had any problem supplying any of our refineries with crude oil,'' Bill Day, a Valero spokesman, said today in a telephone interview from San Antonio. ``We don't usually comment about contracts to specific refineries.''

Falling oil output is curbing Pemex exports to the U.S., which buys about 80 percent of the crude Mexico sells abroad. Sales to the U.S. dropped to 1.07 million barrels a day in May, the lowest since November 1995. Mexico is the third-biggest supplier of crude to the U.S., after Canada and Saudi Arabia.

Output at Pemex's largest field, Cantarell, fell to an almost 12-year low in May, when crude exports dropped 22 percent to 1.376 million barrels. This pushed Pemex production to 2.797 million barrels, below a goal of 3 million barrels.

The revised Shell accord guarantees 170,000 barrels a day of Maya from May until 2023, Pemex said in the filing. Pemex provided Deer Park 200,000 barrels a day since April 2001. Shell has an option to increase how much oil it buys, Pemex said in an e-mailed statement today.

Shell Contract Rates

``Shell Deer Park continues to receive Maya crude oil at or above contract minimum rates with Pemex,'' Shaun Wiggins, a spokesman for Shell in Houston, said in a telephone interview. ``We also receive crude oil from other sources.''

Wiggins declined further comment on contract changes.

Pemex also reduced the supply to Valero's Port Arthur refinery to 177,000 barrels a day in May from 188,000 barrels under a previous contract. The amount guaranteed in the Valero contract is adjusted twice a year based on the refinery's demand in the previous six months, Pemex said in the statement.

Shell and Pemex formed the Deer Park joint venture in 1993. The refinery, upgraded in 1995 to process Maya and expanded in 2001, is capable of processing 340,000 barrels of crude a day.

Maya is a heavier grade of crude oil with a higher level of sulphur that refiners find more difficult to process into fuels. Maya traded for an average of 17 percent less than easier-to-refine West Texas Intermediate crude so far this year, according to data compiled by Bloomberg.

Record Oil Prices

Crude-oil futures traded in New York reached a record $145.85 a barrel on July 3. Prices have more than doubled in the past year.

Pemex buys 50 percent of the gasoline produced at Deer Park and ships it back to Mexico for domestic consumption. Mexico's six refineries, which have the capacity to process about 1.3 million barrels of crude a day, can't produce enough gasoline and diesel to meet rising demand.

Pemex needs to build a refinery every three to four years until 2021 to become self sufficient in gasoline, according to the Energy Ministry.

The company may begin construction of a $7 billion refinery by the end of 2010 to help reduce imports of gasoline and diesel, according to a regulatory filing.

 

[Gunner70]

I think what the Post writer was trying to get accross was unrelated factors like PEMEX reduction AND the NANO India annoucement coming in close proximity in time AND given world production is ONLY 2% ahead of world demand at any give time (POST's numbers) this volitile mix is causing the oil speculators to react in a knee jerk way to drive prices one way or the other (mostly up).

 

[unregistered]

 

[Slowlane]

Listen, it's pure fiction to think there is any alternative to liquid fuels in the foreseeable future. What are you going to do with hundreds of millions of planes, trucks, trains, cars, an ships, plus our military, that require liquid fuels? How are you going to replace the billions and billions of dollars of capital investment they represent? How are you going to replace the economy they represent? It's a damn pipe dream to think there is an alternative to liquid fuels in the foreseeable future. This is a free country, the market will decide what fuels will be used not idealists, not environmentalists, and not the government.

As I have said before; we need everything we have. Oil, gas, coal, nuclear, - and we need to keep developing new stuff as well.

In other words - everything. Limitations on development is foolish.

 

[unregistered]

 

[coastal-boy]

Listen, it's pure fiction to think there is any alternative to liquid fuels in the foreseeable future. What are you going to do with hundreds of millions of planes, trucks, trains, cars, an ships, plus our military, that require liquid fuels? How are you going to replace the billions and billions of dollars of capital investment they represent? How are you going to replace the economy they represent? It's a damn pipe dream to think there is an alternative to liquid fuels in the foreseeable future. This is a free country, the market will decide what fuels will be used not idealists, not environmentalists, and not the government.

dude...are you an idiot? Do you remember how we changed from leaded fuel to unleaded (I know you are close to my age)? Did it happen all at once? Please....you need to start thinking about this logically.

The change needs to start (it needed to start back in the 80's). As for saying there are no alternatives...that is 100% BS. We can supply enough biofuel (not EtOH...that is a stupid pipe-dream) today to supply 10% of our demand immediately IF we had the infrastucture to process it. What would it cost to build that infrastructure? Oh....about the fucking same as drilling for oil in ANWAR. So we would have approximately the same amount of "fuel" capacity produced and one path would keep us addicted to oil and the other path provides a way to wean ourselves off. Which would you choose?

This is a free country...and the MARKET is deciding which fuels to use. The MARKET is saying "if you keep using what you are, you can expect higher and higher prices and are at the whim of other countries". If you want lower prices, the MARKET is saying "use something else". How can this not affect National Security?

What should we do? Everything...anything...I am 100% for drilling IF we simulataneously implement a policy that replaces our dependency on oil (and not some lip service "exploring" the options). But to only drill is not fixing the problem. We are within 10 yrs of loosing our life-style if action is not taken.

 

[Karen Kraft]

Mexico's national oil company annouced it is cutting crude oil supplies to US refiner Valero by 15%. Valero is one of the US's largest refiners of gasoline. Mexico is the third largest supplier of energy to the US after Canada #1 and Saudi Arabia #2.

Do we have to pay them in green-backs, or will they accept wet-backs in payment?

 

[unregistered]

 

[Odd_ball]

NO OTHER FUELS ARE VIABLE OR BEING USED! PERIOD!!!!



http://altfuelsaustralia.files.wordpress.com/2007/09/h2bus.jpg

 

[coastal-boy]

You are so uniformed on this subject it's a waste of time talking to you about it, you are a naive fool. There is no alternative to liquid fuels in the foreseeable future, period. There simply is no amount of left wing bullshit to change that FACT either so don't bother trying to bend my ear with any more of it in the future.

fucking christ...The fucking lab right next to mine is converting microalgae into biodiesel. Our entire fucking fleet of 150 or so vehicles is running on it. It is so fucking easy to produce it is sickening. One room, about 20ft x 30ft producing enough algae to power 150 vehicles, feed all of our critters (the reason it is being raised in the first place) and still have about half go out the drain into the bay as waste. It is sad watching people close their minds to the possibilities. At least America has people willing to actively seek solutions unlike those that can only throw names. Go play with your friends vette and talk some more shit about how America is going down the tubes because of the liberals.

 

[Odd_ball]

Go play with your friends vette and talk some more shit about how America is going down the tubes because of the liberals.

They have a vital interest in oil. Think about this, CB.

If the USA actually goes off oil completely, would we even be in the middle east protecting Israel?

Also, Israel is a major crude oil refiner.

I sincerely hope Israel comes up with an oil solution. It's in their best interest and the interest of the world.

But as it is, as long as the USA is addicted to oil, Israel is guaranteed protection and profit from Uncle Sam.

Just something to think about.

 

[coastal-boy]

They have a vital interest in oil. Think about this, CB.

If the USA actually goes off oil completely, would we even be in the middle east protecting Israel?

Also, Israel is a major crude oil refiner.

I sincerely hope Israel comes up with an oil solution. It's in their best interest and the interest of the world.

But as it is, as long as the USA is addicted to oil, Israel is guaranteed protection and profit from Uncle Sam.

Just something to think about.

If profit is 2%, when a barrel of oil was $25 the companies made $0.50/barrel. When it is $100/barrel, the profit is $2.00/barrel. When the price is $150/barrel the profit is $3.00/barrel. When the price is $300/barrel, their profit will be $6/barrel. They have no motive to change. The higher the price of oil goes, the more profit they make.

If people wanted to be free of our oil addiction, there are alternatives. They just need to be implemented. The oil companies are not going to implement them...can't blame them...their profits will drop.

EDIT
and car manufacturers wont produce cars that can't be fueled...it has to start someplace.

 

[Odd_ball]

If profit is 2%, when a barrel of oil was $25 the companies made $0.50/barrel. When it is $100/barrel, the profit is $2.00/barrel. When the price is $150/barrel the profit is $3.00/barrel. When the price is $300/barrel, their profit will be $6/barrel. They have no motive to change. The higher the price of oil goes, the more profit they make.

If people wanted to be free of our oil addiction, there are alternatives. They just need to be implemented. The oil companies are not going to implement them...can't blame them...their profits will drop.

EDIT
and car manufacturers wont produce cars that can't be fueled...it has to start someplace.

It's like I said before, horse buggy and carriage makers went berserk when the steam train and auto were invented. Radio makers went haywire when TV was invented.

"What will we do with al these millions of radios? People will be watching TV instead!"

A bit of a "sky is falling" attitude.

 

[Lost Cause]

Mexico's national oil company annouced it is cutting crude oil supplies to US refiner Valero by 15%. Valero is one of the US's largest refiners of gasoline. Mexico is the third largest supplier of energy to the US after Canada #1 and Saudi Arabia #2.

Of course it has nothing to do with us getting serious about tapping the world's largest oil reserves here......

http://mostlywater.org/system/files/images/american+oil.jpg

 

[Odd_ball]

Of course it has nothing to do with us getting serious about tapping the world's largest oil reserves here......

http://mostlywater.org/system/files/images/american+oil.jpg

The oil shale out in Montana, etc?

Difficult proposition. Takes a lot of money to extract from the rock. Plus it's low quality crude. Companies are very serious about, but they just have a tough time turning a profit when faced with foreign competition.

I mean,. look how complicated this is, compared with just drilling a hole:

http://i.cnn.net/money/.element/img/1.0/sections/pf/features/biz2_oilcrunch/oil_shale.gif

 

[firespin]

fucking christ...The fucking lab right next to mine is converting microalgae into biodiesel. Our entire fucking fleet of 150 or so vehicles is running on it. It is so fucking easy to produce it is sickening. One room, about 20ft x 30ft producing enough algae to power 150 vehicles, feed all of our critters (the reason it is being raised in the first place) and still have about half go out the drain into the bay as waste. It is sad watching people close their minds to the possibilities. At least America has people willing to actively seek solutions unlike those that can only throw names. Go play with your friends vette and talk some more shit about how America is going down the tubes because of the liberals.

Serious, not Patriots-related question...

I thought the current yields on microalgae fuel were like 2,000 gallons per acre per year. You seem to be implying way more than that from a much smaller area?