Truly, this is hilarious stuff. Not only are we disallowed from drilling for our own oil rich properties, but now, Obama is against transporting oil from Alberta, Canada to Cushing, Oklahoma, all the way down to Houston–where it is needed most. This singular decision, when you break it down, is without a doubt at odds with traditional interpretations of reason and against the will of the American people. Obama is the Manchurian candidate.
So instead of transporting oil from Canada via pipeline, Obama will have it shipped in from Venezuela or Saudi Arabia. You do realize that much of the oil to be transported via Keystone would have originated from the Dakotas, don’t you? Are you aware of the fact that N and S Dakota might have more oil than Saudi Arabia, just waiting to be tapped into? Yet, instead of exploiting this resource, as a nation, we’ve fucked ourselves in the back of a jam sandwich.
Remember when the Seaway Pipeline reversal news fucked refinery stocks–sending me bouncing around crazy at my local mental health facility? The pipeline was sold and Enbridge announced they would magically divert all of that oil from Cushing to Texas, which in turn raped crack spreads and led to a collapse of the WTI-Brent crude spread. Well, ever so quietly, that reversal magic has been delayed until June. Couple that unfortunate news with the Keystone rejection and we have ourselves a Mexican standoff–where America loses and does so without style or pizzaz. Without that extra oil from Canada, the glut of crude will remain at Cushing and crack spreads are poised to recover. Plus, this pipeline fiasco all but ensures that no pipeline will ever be constructed again in this stupid country–reminiscent of our new refinery construction aversion.
Have a look at 321 crack spreads since the Seaway Pipeline news crushed spreads.
Impressive no?
Even better, WNR is 33% hedged at around $27 for the entirety of 2012 and 25% hedged for 2013. The company will report an obscene profit on their hedges– and should spreads recover in full– the stock is going to rip tits, mustaches and blow out brains– making people rich in the process. The companies in the best position to profit from widening spreads are MPC, HFC, CVI, DK, WNR and ALJ.
This has been a very hard trade–due to roller coaster-esque volatility; but I haven’t lost money trading WNR yet. The stock has recovered a great deal from recent lows and is a buy on dips, in my opinion. Although the Keystone denial is a tough loss for the average American; I am not part of that class and take an obtuse position against my neighbor, as any proper oil man would, with the explicit intention–motivated by unparalleled greed– of benefitting from this most ruinous event.
Milk or be milked. $4.00 gasoline by June.
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I hope you are right because I am holding CVI and WNR and would love to see them explode to the upside!
Fly, I hate to sound like an imbecile, but my small brain cannot comprehend this crack spread/Cushing related talk. I thank you for your constant, expertise-infused input, and ever so respectfully ask to be directed towards any pieces, factoids, and articles(s) that can enhance my understanding of the crack spread strategy and what equities to look towards regarding said topic. Thank you
Think of the crack spread as the refineries profit margin, the difference between their expense for crude and the refined product sold to homes and gasoline stations.
When that oil is landlocked at Cushing and is not allowed to flow freely to Houston, the price of refined crude goes up due to lack of supply.
People like to be opposed and protest shit as if they are Vietnam protesters or marching with MLK, Jr. When I was in college the Alaska pipeline was being debated. Enviro’s (and most of us college kids were enviro’s) said the Caribou herds would be decimated; their migration pattern would be blocked and they could not breed and they would all die. My friend’s Dad said, “don’t worry about the Caribou, if they can’t get under the pipeline, they will get over it.” We thought he was being a blockhead, but he was correct.
Keystone XL WILL be approved after the election, although I would rather see it refined in this country and sold directly to Asia, rather than via TX, thus keeping the jobs and taxes here, benefitting the fuck out of me.
I will have you know sieur, that when you are posting on this blog, “this country” is the Youknighted States o’ Uhmaricah.
Put down your Labatts and take heed.
______________
i like that, YouKnighted
My 19th grade education hasn’t prepared me for this conversation.
But I’m ready to tap a Labatts.
I “get it.”
Get it, get it, every single way. Ro$$.
assholes are the funniest part of anatomy; you, sir, are indeed the king of comedy.
ideologues of all stripes are mindless dolts: you, sir, appear to be their leader.
there was a time when you at least pretended to be a ‘free’ thinker; you have become a babbling fool and a party hack.
make yourself useful… get a real job… like at FOX news!
The King of Comedy …. Hahaha, it’s 3am and you cracked me up!
You Fox haters otta go getta job with TMZ. Tools.
My apologies for giving you-all credit for knowing that Calgary is the epicentre of the petroleum industry in Canada; your ignorance is duly noted Sir.
“I am not part of that class and take an obtuse position against my neighbor, as any proper oil man would”
Isn’t that a large contributing factor the America’s decline into decay from the status of the beacon of the free world?
How so?
Beggar your neighbour doesn’t seem like a good plan for a country.
You know me, I am young (in fact I just turned the age you quoted as one of your posts as a milestone of experience), inexperienced and still somewhat of an idealist.
It is the American way to compete. Therefore, I declare you to be my competition and I will slay you for the last piece of bread.
That’s what creates greatness, not sappy charity.
I agree. Was just trying to say it may be easier to achieve greatness when we aren’t all trying to murder each other for the last loaf of bread.
Capitalism is about competition to PROVIDE bread, young ideologue.
Your way consigns us all to the single loaf.
______________
Wait didn’t you study economics? You must have been a terrible student. Do other types of economic organization exist. Man you are dumb.
Murder is not allowed. Nor theft nor fraud. Binding contracts enforceable. Fair competition, each persuing their own best interest. Often times in combination with and cooperation with others when mutually beneficial.
One glimpse closer to textual vomit.
Ironic or course since so many American companies, and investors have massive investments in the tar sands.
It would seem that the only pipeline the big O is interested in is the one he has been stuffing up the American publics ass. Perhaps voters will come to the conclusion that a Sesame Street retread isn’t an ideal choice for the Oval office….
The Fly, thank you so much.
Even more insane is that shutting down Keystone puts that much more pressure on regulators to approve Enbridge’s Northern Gateway.
But here is where your “Manchurian” quip is so apropos – because all of that oil sands crude will, if and when the Enbridge people get their way, go straight to China.
Obama must REALLY hate Texas…
On the other hand – IMHO – I expect Keystone to make it through on the next application, after which Enbridge will be tied up in litigation for years. Company management and the current cabinet in Ottawa have been so desperately overbearing that they have guaranteed whatever decision is made will end up in the Supreme Court.
So oil sands crude will be flowing to Houston long before it flows – if it ever does – to Beijing. In the meantime, Chavez can keep making fun of the O and get away with it.
There’s no oil in South Dakota (just Montana and ND), but agree with everything else.
MPC has also got a ton of existing pipe which just became more valuable.
There are massive untapped reserves in S Dakota
http://www.ksfy.com/story/16040035/south-dakota-oil-untapped-potential
I think it’s a national security thing.
Drop electronic USD on foreigners, deplete their supplies.
Later enslave their people for the price of a few princes having a lil’ harem of US whores.
Watch.
but the 0bama just called for more rich tourists to come to amerika to spend money while americans serve them food and blowjobs. it will all be okay. the 0bama says so.
I actually think that this was a complete sell out to the environmentalists for the election and the project will go through after he suckers them into voting for him again.
Remains to be seen if Canada is still as willing to sell oil to America – my guess is yes since the Harper government loves nothing more than to bootlick America.
what? one day you need to cross the pond to see and then understand america. the 0 fucked up. his base is not tree huggers it is unions. this is america not a freakshow that implodes every fifty years and kills everyone in its borders.
I’ve been to America – Boston is a wonderful and historic city, I did not care for New Jersey too much (no offense). I did not say he was pandering to his base, I said he was pandering to environmentalists – for the record republican senators whose states this pipeline ran through also opposed it.
I do agree it was not a cleaver move.
clever* 1000 pardons.
http://www.huffingtonpost.ca/2012/01/11/harper-planning-return-vi_n_1199087.html
Potential deal could be made in Asia… no more oil for US from Canada, after all it is a free market, this could have created 20K+ full time jobs, see bye bye to these jobs too
Obama is playing political games and losing American future, oh well – he is democratically elected president after all, he can lose whatever he wants…
Canadian energy future is pretty secure with or without US
The jobs are really the side topic in this discussion. This pipeline would have reduced the price of distillates and saved Americans billions.
but then they wouldnt need 0bama gas stamps. there must be a reason for the insanity.
he is playing political theatre, after all he is a politicians..
how many politicians do you know who actually care about their country..
just a bunch of BS..
By the way TRP will re-apply (they can) change the direction so pipeline doesn’t go through some environmentally sensitive areas.. it is not completely over.. so time will tell
absolutely, he knew pols like boehner, especially,and others on the publican side were highly invested in said pipe line. so just like the chicago slut that he is,he fucked them in the ass…..who gives a fuck about the little guy…….certainly not them
The ‘meracuns are the closest bunch of folks with a bunch of currency.
This has nothing to do with whether or not Canada WANTS to sell oil to the US. Canada has to sell it to the US because they have no back up plan.
There is currently a massive groundswell of support to try and stop the pipeline to the westcoast. That would be a direct link to Asia, thus making Canada no longer 100% reliant on selling its oil to the US.
Environmentalists and by extension Canadian media and most citizens feel it would be better to do absolutely nothing with one of our largest resources.
Run the world on wind and solar!
Tell me again how McCain and the Dogsledder would have been doing the “same shit” as this authoritarian leftist asshat and his retarded lackey, Plugs.
___________
Tell me again how you know he wouldn’t be. Aside from your fanaticism.
Young Douchebag, learn Latin and then translate
Quod Est Demonstratum.
The only fanatics here are vapid ideologue jelly jerkers like yourself that keep voting socialist thinking they’re sticking it to “the 1%,” and then wondering why they can’t find a job.
___________
Where was McCain on this deal and on SOPA?
Duh.
_________
Where was Obama on taxing the rich? Has that happened. Your logic, or rather lack there of, is hilarious.
As for your dead language, you can keep it along with your smug sense of superiority that comes from knowing what anyone who took a first year math course knows, QED.
What a pretentious doosh.
What a star pair of anklebiters.
The both uh yez (sic).
______
TJ better dance on forgiveness when I’m in Europe this summer.
If he talks like this to me, he’ll be gutted medieval style.
Bad news for Kno.com, a core GSVC investment. Apple is entering the digital textbook business.
Kno is toast!
meh. who cares?
Ann Althouse blog comment regarding how all the “Question Authority” knee jerk Dem college age voters are getting their comeuppance with SOPA:
Authority just came up and slapped them in the face. “Hi, I’m That Asshole You Voted For.”
__________
so true. the 0 is fucking up all over. the kids wont forget. the young live in the right now.
The hackers really fucked themselves with their cyber-attacks. The Feds are not going to let that kind of shit happen unpunished.
Fly … if I’m reading this right, the tar sands are to be refined in Houston for resale to Asia … There is no intent for the finished product to be distributed here anyway … all the pipeline does is provide a conduit for Canada into Asia. Relief for the Midwest as the landlocked Bakken oil can be moved south but no relief for the rest of the nation.
> Plans for the CANADIAN oil:
TransCanada’s existing contracts and business plans indicate that most of their output will be destined for export, mostly to Asia and Europe, NOT for US domestic consumption. Currently, a good portion of the oil in question is shipped from Canada to the Midwestern US via the existing Keystone pipeline (that’s right, the XL project is just an EXTENSION to an existing line). Once at the end of the line in the Midwest, most of that oil is refined there and consumed there, which has helped keep gas and oil prices relatively low in the Midwest for the past few years. Once/if the pipeline is completed, most of that oil that is currently consumed in the Midwest will flow South (mostly to Texas) where it will be refined and MOST OF IT WILL BE EXPORTED.<
The crack spread was dependent on the WTI-Brent spread which narrowed from the $30 range and has held steady around $10. You motion of justifying the causality of the spread contraction from news of the pipeline reversal requires revision. If you look at the WTI-Brent spread it hit $9, near the low of the year, on the day the news broke about Enerbridge (November 16, 2011). 321 crack spreads moved inverse to WTI-Brent from mid-October to mid-November, and during the period prior when they gradually were diverting. The sharp converging trade was a result of economic reports indicating a strong US economy and weaker European one. If that role switches again we will see another sharp reversal.
Second, today the petroleum report today noted that gasoline demand is tanking. Here’s what it read:
“Demand indications are very weak in this week’s petroleum inventory data. Gasoline demand, measured here by changes in wholesale supply, is down 6.1 percent in the January 13 week for the steepest year-on-year decline of the recovery. Distillate demand, at minus 4.1 percent, is at a six-month low while jet fuel demand, at minus 5.6 percent, is at a year-and-a-half low.
Inventory data show a 3.4 million barrel draw for oil, a draw that follows 3 weeks of builds. Gasoline inventories are up 3.7 million barrels, a third straight sizable build which is certain to get the attention of the markets. Distillate inventories are up 0.4 million barrels for a fourth straight build.”
Trains and trucks have helped fill in the transportation of crude and petroleum based products in lieu of the pipeline until it reverses.
I absolutely have a problem with the disallowing of drilling for oil in the US though. It would divert the consumer’s allocation of funds from fuel to other assets and goods. I mean every fucking integrated domestic company must be glad those drilling permits don’t get dispersed as they punch up /NG futures on their computers.
Trains (read Warren Buffett), trucks and barges of all description are surely less environmentally safe than a new pipeline.
1) IT’S ENBRIDGE NOT ENERBRIDGE.
2) For the first time in more than a decade, the #1 source of US export funds for the month of December was PETROLEUM.
potato, potato
Just finished “Dupes.” Highly recommended book. Basically, reviews since 1917 leftists/liberals/marxists/socialists have been on the wrong side of history. And yet, there is always another generation of useful idiots like TJWP to “keep the dream alive.”
Obama is a tool of Islam and the Saudis. Vote for ANYONE ELSE in 2012 if you want to save America!
think UGA
How does this impact GMXR? are not they involved in the Bakken reserves?
You say “we’ve fucked ourselves”. WE haven’t, THEY Washington D.C. are fucking us. WE didn’t help ship jobs to China. WE haven’t kept us addicted to foreign oil. WE didn’t suppress high gas mileage cars. WE aren’t losing money over in Iraq… the list goes on and on.
What’s even more hilarious about this whole mess is the fact that Phase 2 of the Keystone XL (bisects Kansas) is already 100% completed and online lol. What a joke this is. Thanks 0bama administration for being complete and utter tools about this. Heineman even called out 0bama on his scapegoat.
It’s difficult to imagine a rational reason to not have this pipeline extension built to facilitate energy supplies south of Canada’s border. Canada would prefer to have the tar sand oil sent to us for refining. Any rational official in this country would be more than happy to have this source of fuel local rather than shipped from the Middle East.
Obama is not so stupid to simply cave to a bunch of Hollywood dingbat environmentalists. I mean, his union base is much more important for his re-election aspirations. Thousands of jobs were just denied by his decision.
The technology of the pipeline build coupled with reasonable environmental placement would have assuaged any Nebraska political concerns over the aquifer.
No, I think, conspiratorially , that maybe it was a hat tip to the Chinese. This country is broke. We need China to buy our bonds. Perhaps we simply declined in deference to China. Sounds stupid but any other reason to NOT have this pipeline extended is equally as stupid. I can’t imagine that China would be pleased with this supply going directly to the US. A deal was made, they get a pipeline of energy and we continue to be bailed out.
Buy Canada.
Why would you buy Canada, a country that has no solution to this problem?
And check the yields…I think a few more people other than just China are buying the bonds.
Um, their solution is to sell the tar sand oil to China. I wish I hadn’t written “Buy Canada”. I don’t care to overtly make investment suggestions. Please ignore.
China owns plenty and we are desperate for them to continue to do so.
Google Enbridge pipeline and read about the groundswell of support to try and kill the project.
Read pragcap.com to learn about how China owning US bonds is nothing more than them transferring money from their checking account to their savings account. Chinese exports are bought with US dollars and they transfer that money to an investment that pays a little interest. They really have no other way of dealing with their exports that are paid for in USD. But hey, maybe they’ll incur 10’s of billions of dollars in losses by dumping them and the auctions will no longer be oversubscribed by 2:1. Not sure what they’ll continue doing with all the USD coming in from their exports…I guess they could buy more commodities…which would benefit certain American companies greatly.
So why not have an American company build an American pipeline from the Dakotas to Cushing instead of a Canadian company build one. Why? Because we already have one of those. Oh, and because then it would make it harder for the Canadians to get their nasty tar sands oil refined here in the U.S.
You’re name is Dick, no? Dick, do you like (the) [t]urban?
This gives them something else to crap on instead of fracking.
Obama’s political philosophy is not only undermining the constitution on civil liberties, his agenda will ruin this nation I we do not block liberals like him making his second term possible.