Oil Price War

[Darren]

They squared off in the school yard.

Russia said, We're not going to go along with OPEC quotas and left.

The Saudis said get back here or we'll show you followed by oil price discounts.

I'm thinking Iran is getting pile driven. With Iran already facing a corona virus issue lower oil prices and the sanctions will make it tough for the regime to survive.

We'll be seeing sub $2/gal in much of the US. Does that constitute Russia buying the election for Trump?

[Bicycle Bill]

I'm not sure if that would be as considered Russia manipulating things to Trump's advantage, but you can betcherass that if gasoline were to drop below $2.00/gallon on average (BTW, I tanked up today at 2.12⁹ here in western Wisconsin for 87 octane/10% ethanol blend) that Trump will take full, complete, and personal credit for it.  All I wonder is what sort of spin he would put on it. The successful effects of his tariffs?  His astute — or is that ass-toot? — handling of the economy?  Or will he just fall back on the "I'm Making America Great Again" and we've got the rest of world quivering in their boots ready to do whatever we demand because .... well, "America — Fuck Yeah!"

-"BB"-

[Darren]

We're in uncharted territory. The tariffs put the spotlight on China. Then the virus intensified it. A weaker China might not be a bad thing. Manufacturers need to make a decision.

Trump's trip to India wasn't a whim. India has either passed China in population or is close to it. India needs to build the transport infrastructure to compete.

With Iran's regime getting hard hit by the virus and low oil prices and taking into account the riots last year, it may not be able to continue sponsoring terrorism which is a good thing. That would hasten the return of troops and aid in our disengagement in the Middle east.

The follow on could be a cut in our military budget and instead spending to restore infrastructure.

A similar scenario exists for China if they're forced to stop the rapid build up of their naval forces. We could reduce spending on our Navy too.

[Scooter]

The big loser here is going to be the U.S. oil industry, which is Russia's game plan. Shale oil production is not sustainable at these prices. Your vaunted energy independence is about to evaporate as wells begin shutting down.

[Big RR]

No more drill baby drill?

[Lord Jim]

The big loser here is going to be the U.S. oil industry, which is Russia's game plan. Shale oil production is not sustainable at these prices. Your vaunted energy independence is about to evaporate as wells begin shutting down.

Beat me to it. That's it exactly.

[BoSoxGal]

Well, I seem to recall wishing for the next inevitable economic recession to happen before November 2020 - seems absolutely certain now, between covid-19 impacts and the emerging bear market plus this oil war.

Anything that helps take down Trump is made more tolerable by that side effect.

[Sue U]

The big loser here is going to be the U.S. oil industry, which is Russia's game plan.

I'm not so sure it's Russia's game plan -- it's more just a byproduct that's a happy coincidence for Russia and all other OPEC members as well. Russia is figuring it can withstand the price/supply tiff it's having with with Saudi Arabia, and if it happens to kill the U.S. shale industry in the process, so much the better for all of them.

[Darren]

The big loser here is going to be the U.S. oil industry, which is Russia's game plan.

I'm not so sure it's Russia's game plan -- it's more just a byproduct that's a happy coincidence for Russia and all other OPEC members as well. Russia is figuring it can withstand the price/supply tiff it's having with with Saudi Arabia, and if it happens to kill the U.S. shale industry in the process, so much the better for all of them.

I'm seeing different viewpoints on Russia's ability to sustain an oil price war. Low fuel prices will be a bonanza for trucking companies' profits. People that heat with oil have an opportunity. I'm waiting to buy cheap non-ethanol gasoline.

Meanwhile Russia has a problem with the Ruble. https://finance.yahoo.com/news/crashing ... 04161.html

[Lord Jim]

San Fran gas prices have dropped substantially; one location (not too far from us ) is even under 3 bucks a gallon for unleaded regular (with all the taxes and fees, the Bay Area frequently has the highest gas prices in the country; higher even then Honolulu)

https://www.eia.gov/dnav/pet/pet_pri_gn ... 05sf_w.htm

Pity there's no place open worth driving to to take advantage of the low prices...

Under the current situation, with more and more states and localities going into lock-down, demand will continue to drop even if gas were 50 cents a gallon...

[Darren]

San Fran gas prices have dropped substantially; one location (not too far from us ) is even under 3 bucks a gallon for unleaded regular (with all the taxes and fees, the Bay Area frequently has the highest gas prices in the country; higher even then Honolulu)

https://www.eia.gov/dnav/pet/pet_pri_gn ... 05sf_w.htm

Pity there's no place open worth driving to to take advantage of the low prices...

Under the current situation, with more and more states and localities going into lock-down, demand will continue to drop even if gas were 50 cents a gallon...

I'm not sure what the shelf life is for gasoline at dealers. Once the alcohol in it sucks up water it's a mess. Don't buy from anyone that doesn't get frequent deliveries. If that means driving a distance, it's still worth it.

For truckers, the price drop goes to the bottom line. For some a fill up was upwards of $800. They're thrilled with the drop. Me too!

I'm watching non-ethanol gasoline for price drops. I'm cleaning out five gal. containers. That can be stored for use in small engines.

Meanwhile oversize loads are continuing to move with no delay in permits.

[ex-khobar Andy]

Per Darren:

I'm not sure what the shelf life is for gasoline at dealers. Once the alcohol in it sucks up water it's a mess. Don't buy from anyone that doesn't get frequent deliveries. If that means driving a distance, it's still worth it.

The phase diagram for a three component mixture (gasoline - alcohol - water) is actually quite complex. (And of course gasoline itself is a mix of multiple compounds - maybe 100 or more - but for the purposes of this note you can think of it as a single entity.)

As Darren points out, alcohol will suck up water either from contact with liquid water or from the atmosphere. But in fact if you don't like ethanol in your gas, that's a good thing. The water will separate out carrying some of the ethanol with it and sink to the bottom of the storage tank. At the gas station the supply to the pumps is not from the bottom of the tank, for just that reason. If water gets into the tank it will actually reduce the ethanol percentage in the gasoline. I don't know how gas stations deal with this but there are many ways for water to get into the gasoline tanks - accidents, weather - so they must have a means of occasionally sucking from the bottom of the tank to get rid of the water. It's not the frequency of deliveries you want to look for, but the frequency with which they check for water at the bottom. For the same reason, the fuel pump in your vehicle does not suck from the bottom of the gas tank.

[Darren]

I rarely see places "stick" their tanks with the substance that indicates water. Truckers delivering will check levels. That's about it.

Diesel changes during the seasons. If you get caught with summer blend going into winter, you're screwed when the fuel gels. That's why I'm careful where and when I buy gasoline or diesel.

I'll still go with rapid product turn over.

FWIW the only place I had problems with water in gasoline was a place that got a tanker in maybe every two weeks. Others complained about the water in the gasoline issue too.

In your car's tank, if you have fuel injection, the fuel pump and intake is located inside a small walled area inside the tank that provides a small reservoir to add a measure of protection for the pump when the level gets low.

It also helps keep the pump supplied when the car is subjected to differences of elevation from side to side and front to back when the level is low.

Let the level get too low and you bought a fuel pump which normally requires dropping the tank to replace. That's not a cheap repair.

[Darren]

It's getting better for the little guy. The Saudis are storing oil in tankers. That drives inventories up and prices down.

"“Floating storage is the only way to handle extra oil if the Saudis are testing what they have never done before – record exports of 10 million barrels per day,” a Western consultant who was briefed on Saudi policies said on condition of anonymity."

Meanwhile the order was issued to fill the strategic reserve.

https://gcaptain.com/saudi-arabia-tanke ... 6c704a7af6

[rubato]

"...

I'm thinking Iran is getting pile driven. With Iran already facing a corona virus issue lower oil prices and the sanctions will make it tough for the regime to survive.

We'll be seeing sub $2/gal in much of the US. Does that constitute Russia buying the election for Trump?

Oh, grow up Darren.

N. Korea, Stalinist Soviet Union, the Taliban &c are proof that no amount of suffering by itself will dislodge a political regime.

They are driving down oil prices to hurt US suppliers who have recently become important exporters of oil but need continual fracking to keep production up.

yrs,
rubato

[rubato]

"...

The phase diagram for a three component mixture (gasoline - alcohol - water) is actually quite complex. (And of course gasoline itself is a mix of multiple compounds - maybe 100 or more - but for the purposes of this note you can think of it as a single entity.)
… "

very true. I was working with a chemistry which had Hexane, Ethanol, and water. It was most desireable to have a hexane phase (which contained our product) which had as little EtOH and water in it as possible. I showed that at low water levels there was a single phase which contained all three. Initally, if you add water it goes into that phase along with all of the EtOH. If you add water until the phases separate the hexane phase dries out and loses EtOH. As water is added it dries out more and loses more EtOH.

As an aside, sparging with N2, which we did to get rid of HCl, also removed water and Ethanol even though the boiling points of both are higher than hexane. I'm sure ExKA will see why.

yrs,
rubato

[Joe Guy]

ExKA will CY...

[Econoline]

O I C U R A (YYYYY) S

[Jarlaxle]

$2.299 yesterday...for 93 octane gas.

I understand that's something you people in California may not be familiar with...but yes, there IS gas with greater than 91 octane.

[Bicycle Bill]

$2.299 yesterday...for 93 octane gas.

I understand that's something you people in California may not be familiar with...but yes, there IS gas with greater than 91 octane.

Move to western Wisconsin ... currently $1.29 per gallon for 87 octane/10% ethanol unleaded.  I thought I was going to have to die and go to heaven to see prices like these again.

-"BB"-