Heavy crude can't keep up - Democratic Underground

phantom power

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Thu May-08-08 11:27 AM
Original message

Heavy crude can't keep up

As medium sweet crude oil blends have strengthened in recent months, medium and heavier sour blends have fallen behind. In particular, Middle East heavy crudes have been unable to keep up with the growing appetite for low sulphur middle distillate products, with differentials between Saudi Super Light and Saudi Heavy crude blends widening to record levels. In the Americas, the situation is no different. Despite the large production declines at Cantarell, Mexican Maya is trading at a record discount to Olmeca.

http://www.bi-me.com/main.php?id=19968&t=1&c=33&cg=4

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dkf

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Thu May-08-08 11:28 AM
Response to Original message

1. Very interesting...thanks for posting.

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phantom power

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Thu May-08-08 11:31 AM
Response to Reply #1

2. Based on my limited understanding of refineries, this could be bad...

Refineries are geared to process certain grades of fuel. As the supply becomes more heavily weighted toward heavy/sour, entire refineries will become useless. I assume they can be modified to work with other oil grades, but it's another case of having to run just to stay in place.

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Javaman

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Fri May-09-08 10:32 AM
Response to Reply #2

4. Also because heavy crude also known as sour crude is much

more likely to have much higher levels of sulfur and various other heavy metals, it takes that much more energy to refine it.

Also, it can't be refined into the mulitude of produces that sweet crude can be refined into.

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excess_3

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Fri May-09-08 12:03 AM
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3. heavy crude --> not on a futures exchange

difficult to speculate

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phantom power

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Fri May-09-08 10:34 AM
Response to Reply #3

5. I bet it will be.

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