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Thread: Issues affecting oil prices now

  1. #1
    I received the following advisory from oil industry analyst Bob van der Valk. I've known Bob for about twenty years and frequently featured him on my KCAL-TV news reports. I found this very interesting.

    And I present this here for your comments.
    Best, Alan Mendelson

    A fire at the Amuay refinery in Venezuela — part of the second-largest energy complex in the world — continues to rage, and no one's sure when it will be extinguished. Hugo Chavez keeps claiming the refinery fire is contained and the complex will be back in full operation within 2 days. Meanwhile behind the scenes on the spot market PDVSA- The Venezuelan National Oil Company - is buying gasoline to be shipped from the New York and Gulf harbors as soon as cargoes can be put together. It is all done in secret and off the radar screen in order for traders like Goldman Sachs and Morgan Stanley not to be able to take advantage of the disaster with paper speculation.

    Venezuela has been trying to secure processed gasoline from U.S. refineries — the same refineries which were shut down or partially running because of Isaac for the last six days.

    This caused spot market gasoline prices to spike 50 cents a gallon. Only about 25 cents per gallon of that amount has been passed through to the wholesale and then to the retail gas station level.

    The threatened Norwegian oil workers strike will shut down crude oil production in the North Sea, The Brent crude oil price, which is used as the base for many US refineries to determine the cost of their raw material, will increase if the strike is not called off. Along with the August 6, 2012 Chevron Richmond, CA fire as well the Asmuay, Venezuela refinery uncertainties as long as the fire continues, this perfect storm will continue to send pump prices surging.

  2. #2
    Sounds like a very thorough and reasoned analysis to me, Alan. Bob van der Valk sounds like he really knows his stuff where short-term price catalysts are concerned. I mentioned Peak Oil on another thread, but that's more of a long-term issue for oil prices as energy resources become more difficult to extract and EROEI (Energy Returned on Energy Invested) slowly declines.

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