The oil price is rising and will continue to rise. The latest gyration of the BP saga has seen the big oil executives with operations in the Gulf of Mexico being raked over the coals by Congress for their (admittedly woeful) safety procedures. So, as we go into the summer driving season in the US (but why just blame them?) and Europe, US oil refineries may very well have a bit of shortage of the crude from the Gulf. That would be fine if the refineries could handle the fairly sizeable flow from the OPEC countries and the rest of the world. But a little known dirty secret of US oil refineries is that they are structured to refine mostly light/medium sweet crude. Most of OPEC output is sour heavy and changing over refineries to deal with this sort takes anything from 1 to 2 years. That means the shortfall will probably have to be taken up by supplies from Nigeria, Libya, Venezuela and (I think) Angola and there could be a price discrepancy between that and the benchmark oil price. The uptake of these countries’ product to the US (global security tensions permitting) could also mean some shortage of the diesel so often used in European cars. Could be an interesting summer….
BP’s spill saga continues, the networks in the US are still breathless with nary a nod to other stories (who cares about a bunch of Turks being killed anyway?). The latest obsession being that Obama is not showing enough anger about this fiasco. The American people’s completely warped concept of reality (not to mention Presidential powers and leadership abilities) never ceases to amaze me. What do they expect the President to do beyond what he’s already done? A BBC journalist actually drew parallels with Hamlet at Ophelia’s funeral asking how much Americans wanted their president to show emotion (versus, it’s implied, actually leading the country out of the mess it voted itself into. Twice.). But I digress, like just about everyone else. Continue reading “Trade Notes: BP’s spill that keeps giving”