Since refineries in the Midwest are reaching their heavy-oil capacity, it needs to go to the Gulf Coast.
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As Nansen Saleri, the CEO of Quantum Reserve Impact in Houston and former head of reservoir management for Saudi Aramco, reported in his article in The Wall Street Journal, existing oil capacity exceeds current demand by between 3 million and 5 million barrels of oil a day.
In 1996, oil refining capacity was 1.21 million barrels-per-day, but demand was 1.63 million.
In recent years, oil production capacity in the US has grown rapidly yet prices have hardly collapsed.
This would, vitally, eliminate all the global spare oil production capacity.
Semgroup handles more than 500, 000 barrels of crude oil a day in the U.S., operates two pipeline systems and has 6.7 million barrels of oil storage capacity.
The remaining oil reserves will be concentrated in fewer countries, the risk of oil supply disruptions will rise and oil supply capacity will fall short of demand growth.
The company plans to boost its production by 200, 000 barrels per day, helping it achieve its goal of raising crude oil production capacity to 550, 000 bpd in 2012, the firm said.
Tightening or loosing the availability of capital, which the Federal Reserve has power over, will not change the balance of oil production to refinery capacity or make the oil producing nations politically stable.
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News just in: there is so much untapped oil and refining capacity in North America that the U.S. is about to become a net exporter of petroleum products for the first time in 62 years.
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Following the Exxon Valdez oil spill, the industry recognized the need to enhance its capacity to address oil spills.
Speaking at a conference in Dublin this week, organised by the Institute of International and European Affairs and the Association for the Study of Peak Oil and Gas, Chris Skrebowski, a consulting editor of Petroleum Review, argued that spare capacity in the oil market could be eroded by 2015.
The risk is that higher oil prices will reduce capacity growth, for example by making some capital equipment unprofitable to use.
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Typically, oil prices slump once production capacity starts to grow rapidly and outstrip demand growth.
Investment is pouring into the tar sands, but potential oil exports will outstrip pipeline capacity by 2015.
The Saudis had 1.5 million bpd of spare production capacity--oil spigots on standby--and it was less desirable heavy crude.
The very fact that prices are low for WTI is what is telling us that we need more transport capacity for crude oil.
And I think that tells you that the way to insulate ourselves, the way to insulate the American people from these kind of price shocks, is to increase our energy independence, to reduce our reliance on foreign oil, to increase our capacity for alternative energy production as well as traditional fossil fuel production.
Oil companies have the ability to increase refining capacity, and industry executives are often reluctant to admit that speculation in oil commodities is part of the problem.
Bush's plan, which aims to insulate consumers from high prices while fattening stores of gasoline and other refined oil products, will likely call for the boosting of domestic refining capacity, perhaps by building as many as 40 oil refineries over the next 20 years.
The influx of fracturing capacity is finally helping oil companies to increase production from wells that have already been drilled.
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One positive caveat: Prices for Canadian Heavy are discounted now because of the shortage of pipeline capacity for carrying heavy oil sands crude out of western Canada.
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Hurricane Katrina roared into already tight oil markets, damaging much of America's oil-pumping and -refining capacity, and another hurricane, Rita, threatened to wreak more havoc along the Gulf coast this week.
Oil accounts for some 80% of Nigeria's state revenues but after years of corruption and mismanagement, it has hardly any capacity to refine crude oil into fuel, which has to be imported.
Adding downward pressure, Brazilian oil giant Petrobras said its oil output was back at full capacity and would remain so through the end of a five-day energy workers strike that started at midnight Sunday.
His Conoil Producing, which was founded as Shell Company of Nigeria in 1927 and privatized in 2000, is one of Nigeria's largest independent oil companies, with a production capacity of 100, 000 barrels per day.
Mr. Shakmak said he had no knowledge of a particular threat to Libya, but said Tripoli was sending more troops to the border and to desert oil fields, and boosting communications capacity, as a precautionary measure in response to the Algeria attack.
This aid will undoubtedly benefit another small group of interested parties namely the U.S. oil and gas equipment manufacturing sector but in so doing could also provide state-owned Russian oil and gas companies with the capacity to generate hard currency revenues, monies which in the past have largely gone to enhance military-industrial activities.
This aid will undoubtedly benefit another small group of interested parties -- namely the U.S. oil and gas equipment manufacturing sector -- but in so doing could also provide state-owned Russian oil and gas companies with the capacity to generate hard currency revenues, monies which in the past have largely gone to enhance military-industrial activities.
Seemingly, Iran is now akin to Disneyland, refineries have doubled their capacity and no one wants oil-thus the decline in prices.
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