Gyroscopic Investing

For those of you not following America's recent Oil boom.....

I think I read it somewhere that our exports have exceeded our imports for the fist time in a long while but don't hold me to it.


http://www.ft.com/cms/s/0/1b6753ce-f86f ... z2aTsEfZrY


P.S. - I don't think this is good news for Obama but not sure why.

It's great if you work in the petroleum industry. Otherwise the impact at the pump is average at best. I don't see how this negatively impacts Obama other than the fact that the U.S. oil boom has been in SPITE of his policies. His administration has done nothing to foster it.

I like to see OPEC take it on the chin. I hope some more non-OPEC nations embrace the technology and push oil prices to $80 per barrel for a few years so the price manipulators can feel the effects of supply and demand. Maybe then they will start to build robust societies instead of stupifying their populations with handouts and subsidies.

RuralEngineer wrote: It's great if you work in the petroleum industry. Otherwise the impact at the pump is average at best.

Now why is this? Are we just exporting it all rather than consuming it at home?

Pointedstick wrote:

RuralEngineer wrote: It's great if you work in the petroleum industry. Otherwise the impact at the pump is average at best.

Now why is this? Are we just exporting it all rather than consuming it at home?

Yes.

Edit:  To expand on that, because it's a global market we could produce enough for all of our needs and potentially not impact the price at the pump much. But yes, my understanding is that we've been exporting most of our oil.

And now for my next incredibly intelligent question: why's that?

Is it because foreign gas prices are higher so the petroleum industry can make more money by selling to them instead of us?

Pointedstick wrote: And now for my next incredibly intelligent question: why's that?

Is it because foreign gas prices are higher so the petroleum industry can make more money by selling to them instead of us?

Yeah, my assumption is that the petroleum industry is taking advantage of price gaps in various markets.  We also have a lot of refineries so they may not be exporting crude. 

I have two thoughts to add to this discussion.

First, one of the biggest reasons that new refineries aren't built is that it's very difficult to get permits.

Second, while refiners typically produce the same output (gasoline, kerosene, diesel, plastic feedstocks, etc.), not all of them can handle the same inputs.  The refiners who are able to refine very poor quality feedstock are able to be make a bigger profit on the lower quality crude.  For these refiners, it makes more sense to find the lowest quality oil they can find and process it.  It may be (I'll have to ask around) that the oil being produced from many of our reservoirs here in the US is a higher quality product and thus easier to refine, so many of our refineries which are set up to run low quality feedstocks will pass on the high quality oil (unless they get it at a discount), at which point it may be more profitable to export it to somewhere else.

My understanding is that U.S. oil is of pretty high quality, low sulfur, and is easy to refine.

Not everyone is so enthusiastic. I always check out theoildrum.com perspective whenever I hear too much optimism. This is about as well researched as you will find a lay article: http://www.theoildrum.com/node/9506