January 15, 2015 by Dave Hirshfeld, MathPro Inc. 2014 was a year of intense debate – political, economic, and technical – over repealing or revising the federal law and regulations that essentially ban the export of U.S. crude oil. The issue took an intriguing turn on December 30. While the rest of us were gearing up to celebrate the New...
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January 11, 2015 by Pete Carey, San Jose Mercury News Bay Area drivers are already celebrating the recent collapse in oil prices, but if it lasts it will have broader economic implications, putting billions of dollars a year directly into the wallets of residents and helping to stimulate the region’s already robust economy. And a lot of that money is...
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December 11, 2014 Filling up the Stillwater Honda Odyssey cost a very jolly $45 this week, the delightful effect of a glut of crude oil supply. The drop in prices at the pump is giving consumers a little unexpected year-end bonus. Crude oil spot prices are the lowest they’ve been since we started this blog. On Monday WTI hit...
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December 5, 2014 by Dave Hirshfeld, MathPro Inc. In June 2014, the Congressional Budget Office (CBO) published an analysis of the feasibility and economic implications of achieving future annual renewable fuel mandate volumes1 for the federal Renewable Fuels Standard (RFS). Here in Regulation City, refining industry advocates praised the CBO analysis; ethanol industry advocates trashed it. Elsewhere, the report...
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November 5, 2014 by Dan Murtaugh, Zain Shauk and Lynn Doan, Bloomberg Things are slowing down at the U.S.’s largest oil-import hub. Just six years after importing more than 1 million barrels a day from countries including Saudi Arabia, Nigeria and Iraq, the Louisiana Offshore Oil Port is receiving just half of that from overseas, highlighting a nationwide trend at...
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October 30, 2014 On Monday with WTI priced at $81 per barrel, Eagle Ford and WTI-Midland were listed at parity with WTI. Bakken at Clearbrook came in at $13 under WTI. While the Western Canadian Select differential has narrowed to $7 under WTI. While we’re seeing discounts in the Mid Continent, prices on the coasts continue to drop. Brent...
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October 21, 2014 by Lynn Doan and Dan Murtaugh, Bloomberg Stockpiles of oil from Alaska’s North Slope have surged to a five-year seasonal high as tanker maintenance slows loadings, forcing the grade to trade at a discount to U.S. crude for the first time since 2010. Inventories at the Valdez terminal, the northernmost ice-free port in North America and the...
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Dave Hackett’s presentation at the Annual OPIS Supply Summit on October 27, 2014. This presentation discusses the current California LCFS and Cap & Trade regulations and how they are affecting the transportation fuels industry in the state. It also explores the status of clean fuels and low carbon fuel standards being considered in other states around the country. VIEW PRESENTATION...
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October 17, 2014 by Dan Murtaugh and Lynn Doan, Bloomberg Oil traders might see the 27 percent slide in global prices as a bear market. For U.S. consumers, it’s more like an early holiday gift. The drop in crude has pulled retail gasoline down more than 50 cents a gallon from the year’s high in April. That means annual savings...
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October 15, 2014 by Dan Murtaugh and Lynn Doan, Bloomberg Regular gasoline in the U.S. fell to the lowest level in more than three-and-a-half years as shale oil production and weak global demand spurred a four-month slump in oil prices. The average retail price fell 0.9 cents a gallon to $3.177, Heathrow Florida-based motoring group AAA said on its website...
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Dave Hackett’s presentation to the Quest Club of Bakersfield on the fundamental problem the energy industry faces in the Mid Continent. The presentation also takes a look at the Pacific Basin and suggests additional solutions. VIEW PRESENTATION
October 3, 2014 by Lynn Doan, Bloomberg One of Russia’s prized oils, facing increased competition in Asia, is traveling to a rather unlikely destination: the U.S. West Coast. As the U.S. threatens President Vladimir Putin with further economic sanctions over the conflict in Ukraine, light Sokol oil from Russia’s Far East is showing up in California for the first time...
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September 26, 2014 Crude oil prices in the Texas tight oil producing regions are suffering from the same over-supply problem as the Mid Continent. There’s a lot of crude oil in Texas and prices reflect the oversupply. For that reason, the Bubble has been stretched a bit to include the Lone Star State. Prices for WTI-Midland and Eagle Ford...
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September 8, 2014 by Lynn Doan, Blooomberg California, the nation’s largest gasoline market, has cut its oil-by-rail volumes from Canada by 86 percent this year while buying more crude made in America. The most populous U.S. state received 3,142 barrels a day by rail from Canada in July, down from 6,669 in June and a peak of 22,871 in December,...
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August 24, 2014 by Tony Bizjak and Curtis Tate, The Sacramento Bee KERN COUNTY – In Sacramento and the Bay Area, recent plans to run trains laden with crude oil through downtowns to coastal refineries have prompted fears and protests this summer. But, here in the southern San Joaquin Valley, where oil has served as economic lifeblood for more than...
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August 23, 2014 Angel Gonzalez, The Seattle Times In Seattle, America’s energy boom can be seen but not felt. At least not at the gas pump. Trains bearing crude oil cross the city’s busy core every day, connecting North Dakota’s prolific oil fields to refineries on the coast. Yet gasoline prices here have remained stubbornly high, even as an abundance...
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August 20, 2014 by Lynn Doan, Bloomberg Just as Global Partners LP (GLP) gained approval to unload more oil from rail cars at a marine terminal in Oregon, Tesoro Corp. (TSO) learned its plans for a similar project in neighboring Washington will have to wait. The projects are among several oil-by-rail proposals facing rising opposition after a series of derailments...
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August 19, 2014 by David Hackett Market participants are starting to speculate about the next phase of Cap & Trade under California’s AB32 the Global Warming Solutions Act. That phase, Fuels Under the Cap, is designed to control Greenhouse Gas (GHG) emissions from transportation fuel, including gasoline, diesel, propane and natural gas. The first phase of Cap & Trade includes...
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August 19, 2014 by Barry Schaps Recently, veterans in the oil industry have been questioning their long held assumptions about what really constitutes crude oil produced at the wellhead. One may ask, with everything else going on in the world, “Why is this important?” The short and simple answer is that “traditional crude oil” (loosely defined as liquid hydrocarbons from...
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August 18, 2014 by Lynn Doan, Bloomberg Spot gasoline in San Francisco at the highest premium to Los Angeles in two weeks has opened an arbitrage for fuel to flow north. Spot California-blend gasoline in the San Francisco Bay area gained 1 cent a gallon versus the same fuel in Los Angeles to a premium of 8 cents, its highest...
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August 15, 2014 By Kristen Hays, Reuters The first new crude-by-rail project at a California refinery is likely to win approval next month after more than a year of scrutiny, the head of the Kern County planning division told Reuters, and it could help reopen the shuttered plant. The facility at independent refiner Alon USA Energy Inc.’s Bakersfield plant would...
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August 6, 2014 by Dan Murtaugh, Bloomberg The gusher of crude from the Permian Basin has spurred new investments from refinery and pipeline companies trying to take advantage of low prices caused by rising supplies. Delek US Holdings Inc. (DK) expects to expand its refinery in Tyler, Texas, by 25 percent in early 2015, and Sunoco Logistics Partners LP (SXL)...
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August 6, 2014 by Lynn Doan, Bloomberg California, home to two-thirds of refining capacity in the western U.S., brought in a record volume of waxy oil by rail from Utah in June as crude imports from Canada and North Dakota slid. The state, the biggest gasoline market in the U.S., received 2,737 barrels a day of oil by rail from...
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It could take more than three years to fully halt the shipment of them most flammable liquids in the most dangerous rail cars. By Elizabeth Douglass, Inside Climate News The Obama Administration’s proposal Wednesday for making oil-laden railcars safer runs 203 pages and includes a host of new rules for carrying flammable fuels by train – but they come with...
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June 24, 2014 by Leigh Noda Now in its fourth year to meet a ten-year target, the Low Carbon Fuel Standard (LCFS) continues to be an evolving regulation. With the extension of the 2013 standard to 2014, and the concepts discussed below that CARB introduced in March, we see a regulatory trend of CARB expanding the potential for LCFS credit...
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June 24, 2014 by David Hackett The success of drilling technology in North America’s Mid Continent has lead to a huge increase in crude oil production. In 2010, crude oil production in North Dakota was about 310 thousand barrels per day (kbd). This year, production is expected to reach 1 million barrels per day. Light sweet crude oil from the...
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May 2, 2014 By Lynn Doan, Bloomberg California, the most-populous U.S. state and biggest gasoline market, more than doubled the volume of oil it received by train in the first quarter as deliveries from Canada surged. The third-largest oil-refining state unloaded 1.41 million barrels in the first quarter, up from 693,457 a year ago, data on the state Energy Commission’s...
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February 14, 2014 by Bradley Olson, Bloomberg The new California crude explorer planned by Occidental (OXY) Petroleum Corp. will emerge as the leading player in the state’s drive to dominate the U.S. oil boom. Believers in a revival of California’s former status as the nation’s biggest producer will find the ideal investment vehicle: a high-growth producer drilling the vast Monterey...
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RINs prices have gone way up since the beginning of the year. This presentation offers a little explanation of how RINs flow through the fuel supply chain and why the cost of RINs have gone up recently. VIEW PRESENTATION
On April 25th, Dave Hackett delivered a presentation at the 2014 AFPM Annual Meeting entitled The Effect of Crude-by-Rail on Refining and Logistics. Everyone in the crude oil supply chain is interested in crude-by-rail (CBR), but there are problems that have to be solved. Crude oil production in the Mid Continent has run way ahead of infrastructure. CBR is helping...
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Dave Hackett’s presentation at the 2014 AFPM Annual Meeting. This Crude-by-Rail presentation lays out the benefits and challenges of delivering Mid Continent crude oil to refining centers on the East, West and Gulf Coasts. VIEW PRESENTATION
March 24, 2014 by Michael W. Bloch Often when Upstream projects are under development, it maybe difficult for design engineers to see beyond a specific set of capital investment goals. It is important that new Upstream projects be reviewed with a Downstream perspective in advance of making decisions, reviewing draft development plans and commercial agreements, or agreeing to preliminary or...
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February 12, 2014 Dave Hackett spoke with KGET News Channel 17 about crude by rail projects in Bakersfield, CA. The two part series, entitled Tracking in Oil, investigates proposed crude by rail projects and discusses the benefits and challenges crude by rail projects bring to Bakersfield. Watch Part 1 and Part 2 of this informative series.
March 23, 2014 by Mark Pilcher LNG has been in the news a lot lately. Political opponents have been waging a propaganda war over the economic benefits and the environmental impact of LNG exports from the U.S. LNG has been described as a clean transportation fuel alternative to diesel, and as an environmental Trojan Horse. More recently, LNG has been...
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March 23, 2014 The latest Bubble Map shows the Bakken discount has narrowed considerably since we last checked in. On March 20th Bakken at Clearbrook, MN was posted at $4 under WTI. The WCS discount has also narrowed to $19 under WTI. On the Gulf Coast, the LLS premium to WTI has shrunk to $3 over while Maya’s discount...
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February 4, 2014 As part of an effort to foster constructive dialogue and action on reforming the Renewable Fuel Standard (RFS), the Bipartisan Policy Center (BPC) Energy Project has released three of five commissioned background papers on the RFS. Stillwater Associates is proud to be part of this conversation by providing a white paper entitled Petroleum and Renewable Fuels Supply...
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December 12, 2013 by David Hackett For a long time I’ve been concerned about the barriers that have been created to stifle industrial development in the United States. Here in California it is virtually impossible to create new industrial facilities. For example, we have a client who has been working for years to develop a new crude-by-rail unloading facility in...
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January 31, 2014 By Lynn Doan and Dan Murtaugh, Bloomberg.com California, the third-largest oil-refining state in the U.S., is bringing in a record volume of oil from Canada by rail as it faces shrinking supplies from Alaska and within the state. The most populous U.S. state received 709,014 barrels of crude from Canada by rail in December, a 4.9 percent...
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By Gretchen Morenson and Robert Gebeloff, NY Times It was supposed to help clean the air, reduce dependence on foreign oil and bolster agriculture. But a little known market in ethanol credits has also become a hot new game on Wall Street. The federal government created the market in special credits tied to ethanol eight years ago when it required...
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December 12, 2013 The last Bubble Map of the year shows the Bakken discount has narrowed since we last checked in. On December 9th, Bakken at Clearbrook, MN was posted at $10 under WTI. But the WCS discount has widened to $26. Maya remains at $9 under WTI. The Brent, Louisiana Light Sweet and Alaska North Slope differentials have all...
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October 18, 2013 Well…not really. But the Bakken discount has widened since we last checked in. On October 16, Bakken at Clearbrook, MN was posted at $12 under WTI. LLS was priced $1 over WTI and Brent was $9 over. San Joaquin Valley Heavy has dropped to $5 under WTI. Alaska North Slope was $2 over WTI on October...
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September 9, 2013 Well, the kids are back at school and we’re all back working away. The kids will be asked, “What did you do this summer?” Our kids will be writing about Disneyland, stand-up paddle boarding (coming nose to whiskers with sea lions), and surfing in Southern California. We had a very full summer schedule at Stillwater and everyone...
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July 25, 2013 Mexican Maya differential returns to the latest edition of the Bubble Map! The last time Maya appeared on the Bubble Map, way back in April, it was $7 over. We found a new price-reporting source for Maya that show it $5 under WTI on July 24th. Yesterday, Bakken at the wellhead was discounted by $22, but...
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June 17, 2013 The June 14th Bubble Map shows some big changes in the Bakken at Clearbrook price. The differential at Clearbrook has been volatile since we last checked in. It peaked at a $3.50 premium earlier last week, settling at a $2 premium over WTI last Friday. The Bakken differential at the wellhead was unchanged. The WCS discount...
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June 5, 2013 In the June Bubble Map we see some interesting differentials west of the Bubble. The WTI-San Joaquin Valley Heavy differential is the tightest we’ve seen…ever. SJVH is just a $2 premium over WTI, down from $6 in our last post. The WTI-ANS differential has also tightened to $7 over, down from $10 last month. It looks...
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May 14, 2013 We’ve given the Bubble Map a fresh look for spring. It’s a little less busy, but still contains the same great information. Notice the two price differentials for Bakken, one at the wellhead and one at Clearbrook, MN. We thought it would be instructive to show the cost of moving the crude by truck to the...
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April 8, 2013 The April edition of the Bubble Map shows that Mid Continent price differentials to the coast have gone down since our last update in January when Brent was $18 over WTI. The WTI/WCS differential is the narrowest since last October. WCS prices generally strengthen in spring because the start of the paving season improves demand for asphalt....
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February 15, 2013 When gasoline prices in California shot up to record levels last fall, the public was reasonably frustrated and the media and policy makers were eager to understand the root causes of the spike. Stillwater monitors crude oil and retail gasoline prices daily and we wrote extensively about this price spike on our blog. Our take on the...
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February 8, 2013 Pacific Rim refineries have the capacity for Canadian heavy crude oil, but the window for opportunity is narrow. Unless crude oil producers in Alberta can find a way to get their product to refiners in the Pacific Rim consistently, those refiners will start looking for heavy crude elsewhere. On Thursday, the University of Calgary School of Public...
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February 5, 2013 The average price for retail gasoline in Los Angeles yesterday was $4.03, 23 cents higher than the price last Monday of $3.77. It’s typical this time of year for retail prices to rise, but this price spike is unique because prices have jumped so high so quickly. There are three factors driving this price spike. First, it’s...
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January 8, 2013 We’re back in the New Year with an updated Bubble Map. Crude oil prices have gone up across the board since our last blog post on November 27. Differentials between WTI and most marker crudes have tightened, except for WCS. The WCS discount has deepened since before the holidays to $36 under WTI. Oversupply in the Mid...
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November 27, 2012 The price of gasoline in California has stabilized, a gallon of regular in Los Angeles today was $3.79, down $0.91 from the height of the spike on October 8th. And now the congressional investigations are heating up. At the California Senate hearing on the price spike held earlier this month, energy consultant Robert McCullough presented a report...
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November 15, 2012 The Bubble Map is back! Since we last checked in crude oil spot prices have fallen. The price of WTI has dropped $10 since the end of August to $85.45 on November 15th. The price differential between WTI and WCS has doubled to $32 under. Limited pipeline capacity is to blame for the slump in the price...
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October 7, 2012 What happened in the spot market? Spot prices started to move up on refinery problems on 9/27. By Monday, October 1, the spot was up 30 cpg On that Monday, Exxon Mobil’s Torrance refinery lost power due to an equipment failure at Southern California Edison. Spot prices rose to 83 cpg to $4.22 by Wednesday. On Thursday...
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August 29, 2012 Gulf Coast crude differentials dropped this week due to a surprise bump in crude inventories. The price of WTI is down slightly from last week, closing at $96 on August 28th. The prices of Brent and Louisiana Light Sweet have dropped $3, to $17 and $15 over WTI respectively. While prices in the Gulf Coast are off,...
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August 8, 2012 Crude oil prices are up considerably since our last blog post. WTI closed at $94 on August 7th, up $6. The spreads between WTI and most coastal crudes remain relatively unchanged. However, the San Joaquin Valley Heavy differential has shrunk to $5 over WTI, down from $9 last week. Discounts in the Mid Continent have tightened. Bakken’s...
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August 1, 2012 WTI closed at $88 on July 31st, unchanged from our last blog post. The spreads between WTI and Brent, Alaska North Slope and San Joachin Valley Heavy are up. The Brent spread is up $2 from July 16, to $18. Discounts in the Mid Continent have widened again. Bakken’s discount is back to $5 under WTI. The...
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July 16, 2012 Since our last blog post, crude oil prices have rebounded. WTI closed at $88 on July 16th, up $4 since we last checked in. LLS and Brent prices have also risen. The spread between LLS and WTI is up $7 from our last post, to $19 on July 16th. The spread between Brent and WTI is...
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June 20, 2012 Crude oil spot prices have remained in about the same place since the last blog post, except for Western Canadian Select and Bakken. WCS has dropped another $2 from June 1, to $22 under WTI. The Canadian Pacific Railway strike, that ended last Friday, may have played a small part in the bottleneck. Although CP does not...
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June 5, 2012 The last time we checked in on the Mid Continent Bubble, the price differentials between WTI and Bakken and WCS had softened. On May 16, Bakken was $2 under the WTI price of $93 per barrel, and WCS was $15 under. Since then the price of crude oil has dropped. WTI sold at $86 per barrel on...
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May 17, 2012 We continue to keep a close eye on the crude oil supply situation in the mid continent. Since the last blog post, the price differentials of marker crudes have shrunk. As you can see from the map, on May 16, WTI was selling at $99 a barrel, down from $103 a barrel this time last month. Brent...
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April 7, 2012 Oil market observers know that there is a disconnect between the prices of the two benchmark light sweet crude oils, West Texas Intermediate and North Sea Brent. In the past, these oils traded for about the same price. The difference, or spread, between WTI and Brent opened up when more and more crude oil began to...
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January 11, 2012 By David Hackett The School of Public Policy at the University of Calgary published “Catching the Brass Ring: Oil Market Diversification Potential for Canada” on December 15, 2011. The paper “…examines the nature and structure of the Canadian oil export market in the context of world prices for heavy crude oil and the potential price differential...
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January 3, 2011 By David Hackett Stillwater has been following the LCFS issues from the start and we have concerns about the feasibility of the biofuels program to meet the carbon intensity goals at an affordable price. Our calculations indicate that the regulation will increase motorists’ costs by billions of dollars per year as the transportation fuel industry is forced...
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By David Hackett An energy analyst friend of mine from the East Coast called and asked me why gasoline prices are so cheap in California. This is a question I have been puzzling over all summer. Of course, most readers are going to say, “What are you talking about? Retail gas prices in LA are around $3.75. That’s not cheap!”...
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August 22, 2012 Crude oil prices are up this week with WTI closing at $97 on August 22nd. The spreads between WTI and most coastal crudes remain relatively unchanged. The price of Bakken remains relatively in line with WTI at $1 under. The WCS discount continues to tighten to $11 under from $14 on August 14th. With global crude oil...
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Update April 23, 2012: BP has continued to be tight-lipped about the Carson Refinery Sale. Keep checking in with Stillwater to stay up-to-date on the latest refinery sale news. Refer to our April Newsletter to find out about East Coast refinery sales. Be sure to sign up for our email newsletter to get in-depth downstream transportation energy news and analysis....
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By Dennis Gannaway The distribution of gasoline and diesel from refineries and import points to sales terminal loading racks is a complex activity. Supply programs are often buffeted by shifting economics and a variety of intrusive factors. Most product supply groups have developed operating practices that prevent supply chain problems from affecting tankwagon customers, but past analysis has indicated room...
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Because we want to make a new client’s experience as efficient and productive as possible, we thought it would be helpful to explain the problem solving process Stillwater uses when we first meet a client. Clients come to Stillwater for two main purposes: Companies see opportunities they want to explore and evaluate. Stillwater has long and broad experience in transportation...
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June 5, 2013 by David Hackett Who would have thought three or four years ago that natural gas and crude oil production in the U.S. would grow to the point of tipping the energy supply balance around the globe? According to the Wall Street Journal, cheap natural gas in the U.S. has resulted in lower energy prices in Bulgaria. As...
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On December 15th the University of Calgary School of Public Policy released a comprehensive analysis of the effects of new pipeline capacity from Canada into the U.S. entitled “Catching the Brass Ring: Oil Market Diversification Potential for Canada” Catching the Brass Ring: Oil Market Diversification Potential for Canada”. Stillwater Associates’ contribution to the paper included information on global supply and...
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August 1, 2012 by Megan Boutwell California’s Low Carbon Fuel Standard remains controversial. Obligated parties to California’s Low Carbon Fuel Standard continue to study the regulation and wonder if it is even feasible. A study commissioned by Western States Petroleum Association and authored by the Boston Consulting Group is the latest to make headlines by predicting the severe negative impacts...
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August 1, 2012 By Leigh Noda Stillwater Associates has been closely following the Mid Continent Crude Oil Bubble which is being fed by the growing volumes of Bakken and Canadian crudes. Although almost all of the exported crude from Western Canada is destined for the United States, if either or both of the proposed pipelines get built to the West,...
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September 18, 2012 By Megan Boutwell When Buckeye Partners’ West Shore Pipeline had to be shut down this summer due to a leak, threatening gasoline shortages, Michigan’s governor Rick Snyder triggered provisions in the state’s energy assurance plan by declaring and energy emergency. This emergency declaration allowed drivers of gasoline trucks to be exempted from federal and Michigan weekly hours...
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September 18, 2012 By Megan Boutwell As we mentioned in our August 23rd blog, last month the Obama Administration stated that they were considering a sale from the Strategic Petroleum Reserve (SPR) in the event of a crude oil price spike or supply interruption. Currently the SPR contains 694.9 million barrels of crude oil, twice the amount of commercial crude...
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October 24, 2012 by Leigh Noda On October 16th, oral arguments were heard before three justices of the Ninth Circuit Court of Appeals on the California Air Resources (CARB) appeal. The District Court for the Eastern District of California in December found that California’s Low Carbon Fuel Standard (LCFS) violated the Commerce Clause of the US Constitution that limits states...
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September 14, 2013 By Gretchen Morenson and Robert Gebeloff, NY Times It was supposed to help clean the air, reduce dependence on foreign oil and bolster agriculture. But a little known market in ethanol credits has also become a hot new game on Wall Street. The federal government created the market in special credits tied to ethanol eight years ago...
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Dave Hackett’s presentation at the 2013 API Storage Tank Conference. This presentation on crude-by-rail (CBR) answers these questions: What has changed in the CBR space? Why are refinery and trading people so interested? What comes next? How long is this phenomena going to last? VIEW PRESENTATION
Dave Hackett’s presentation at the 2013 AFPM Annual Meeting on the effects of California’s Low Carbon Fuel Standard. The presentation explores these questions: Will the regulation be adjusted to reflect market conditions? How hard do regulators push for new technology development? How do we know this innovation is occurring fast enough to meet the schedule set forth by the regulation?...
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Presentation by David Hackett to the 14th Annual OPIS Supply Summit on October 24, 2012 on the current regulations, the potential adjustments, implementation schedule, and likely impacts of California’s Low Carbon Fuel Standard. VIEW PRESENTATION