Keystone = higher American prices
American gasoline, diesel, jet fuel, etc higher prices because
America no longer is a closed market where gluts result in lower prices.
Surplus production is sold as exports thus denying the supply and demands balance and equation that would lower our prices.
Instead, the market in American prices is being redefined and set by the more expensive foriegn market supply and demand balance and equation.Have you notice over the years that the North Sea, Brent crude oil price was always $15 to $20 higher than the American based price which has been set to the benchmark price of the terminal point of Cushing in Texas which was called West Texas Intermediate Crude?
That difference annoyed American producers and refiners ... they wanted to gain the higher price.
Now with exports net gainers over imports, they set American prices higher towards gaining some of the difference between the higher Brent, North Sea benchmark spread to West Texas Intermediate crude prices. Similarly, the result is higher gasoline, diesel, jet fuel, etc.Why?
Aside from the greed, price arbitrage or capturing the spread is a common trader technique for profits. Net exports give face validity, the appearance of a fundamentally acceptable reason the public can grasp.
The Keystone pipeline does more of this by shipping to a convenient place along the Gulf Coast where refineries exist to convert the crude into products such as gasoline, diesel, jet fuel that can be exported for higher benchmark Brent type prices benchmarks set outside of the domestic American market place's supply and demand balance or equation. Redefining the market using the Keystone Pipeline supplied crude and products results in ... higher American prices.
Even this partial completion of the Keystone Pipeline helps push up American prices because the net exports helps reset the price benchmarks to foreign markets.Obama's cave in on the Keystone Pipeline costs every American in higher delivery costs of products and people within the American continental states because virtually all things of substance get moved by trucks, planes or cars which will pass along the higher cost of fuel.
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Feb 29, 2012
U.S. exported more gasoline than imported last year
For the first time since 1949, the United States exported more gasoline, heating oil and diesel fuel last year than it imported, the Energy Department reported today.
Bloomberg writes that to offset weak U.S. demand, refiners exported 439,000 barrels a day more than were imported the year before. In 2010, daily imports averaged 269,000 barrels, according to the Petroleum Supply Monthly report.
Imports of crude oil and related products fell 11% last year, reaching a level not seen since 1995.
News of record gasoline exports comes as the pump price rose today for the 22nd straight day ($3.78 a gallon average) and the Energy Department reported separately that gasoline inventories fell last week while crude oil inventories and imports rose.
Crude oil inventories swelled by 4.2 million barrels last week, more than four times what analysts expected and eight times the estimate of the American Petroleum Institute, 24/7 Wall St. says, adding, "To say that the increase in imports is counter-intuitive is not an overstatement."
Refineries were running at 83.6% of capacity last week, according to the Energy Information Administration's weekly report on petroleum supplies.
Separately, in a piece headlined "Oil Refiners Look To Exports Growing Profit," 24/7 Wall St. writes: "The rise in imports could be the result of the decline in refined products, but more likely is that the imported crude is being refined and the refined products are being exported."
The article explains what major oil companies and U.S. refineries -- Valero Energy, Tesoro, Marathon Petroleum and HollyFrontier -- are doing to boost their profit margins:
Crude at Gulf Coast refineries is priced at the Brent crude import price, no matter where it comes from. Refineries in the US interior are typically able to get the vast majority of their crude at or below domestic the WTI [West Texas Intermediary] crude price. Today, a barrel of Brent costs about $121, and a barrel of WTI costs about $106. That $15 difference in feedstock pricing pays dividends at the refinery. ...
To boost margins at Gulf Coast refineries, Valero and the others are exporting more refined products, both gasoline and the higher-priced diesel fuel. ...
The secret to making a profit in refining these days is for refiners to source crude oil domestically and then sell the refined products to US consumers at prices based on imported oil. Valero can't do that, but Marathon, Tesoro, and HollyFrontier can. ...
Despite higher-than-expected oil inventories and less driving by Americans, the price of crude oil finished higher today.
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