Tom Kloza
@TomKloza
Chief Energy Advisor, Gulf Oil. Keynote speaker, co-founder of OPIS. Been covering energy markets since Jimmy Hoffa went missing. tkloza@klozaadvisorsllc.com
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After a three week lull, Ukraine has hit two large Russian refineries in the last 48 hours. Drones heavily damaged the 165,000 b/d Novokuibshevsk refinery Thursday night, and last night saw drones knock out a catalytic reformer at the huge 470,000 b/d refinery at Ufa.
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Let's put Valero purchase of LyondellBasell refinery in perspective. They are paying $320.5-million. That essentially matches the cost for the two refinery turnarounds staged by Irving Oil in 2023 and 2026. Quite a bargain price.
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Capacity is actually 264,000 b/d and they may eventually get back to that number. But restarting one crude train probably gets them to the 165k mentioned.
Woah: LyondellBasell has sold its shut-down refinery in Houston to Valero... could Valero get this refinery back online in the next 6-12 months? capacity is ~165,000bpd and its in a pretty good location.
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In the wake of Valero's surprise purchase of mothballed LyondellBasell refinery there were be speculation about other refinery resurrections. None are likely with the exception of the once mighty HOVENSA refinery on St. Croix, V.I.
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Valero's restart of the former Lyondell Basell refinery in Houston next year will bump up PADD 3 processing capability to over 10-million b/d next year, or about 56% of all US capacity.
Valero is buying the mothballed Lyondell refinery in Houston and today said they will restart the facility and process about 167,000 b/d of crude and feedstock sometime in 2027. Not on most traders' bingo cards for sure.
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Wild day on tap in the oil markets. Ukraine ended the uneasy energy logistics' truce with a new attack on Russian refinery and it's expiration day for RBOB and ULSD futures.
Beware if you bet on gas price moves on Kalshi. Platform asks how low will US gas prices get this mo. and pays ~double for “Below $4.20.” But settlement comes 11PM tomorrow so it only includes AAA prices posted overnight.
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Wholesale gas prices are tumbling and we should see about half the country with retail pump prices below $4/gal on Election Day. Three of those states - - IN, GA, and NC - - are sub-$4/gal thanks to tax suspension but they'll be joined by some red & blue states in next 5 days.
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This will be a climactic act to watch on the first November weekend.
NEWS w/ @anna_c_kramer: Trump aides are privately pressing US firms to take shipments Russian diesel currently crossing the Atlantic, sources say
Firms do not want to say yes, seeing major legal & reputational risks
Ukrainians warn against accepting “blood money”
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Sinclair comments at earnings' conference call mention Canadian heavy crude at $31/bbl discount to WTI. That means global crude varies from that $71.78/bbl number to the $123.50/bbl or so paid for some North Sea physical blends this afternoon.
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Listened to much of the press conference this afternoon -- there should be a word that combines smug & arrogance for Mr. Warsh.
"I'm not a Wall Street newsletter" -- Kevin Warsh
Neither am I, but I do co-write a newsletter which you should subscribe to here.
Gasoline prices in the Great Plains are not matching the 4-15cts/gal increases in US Coastal and Great Lakes markets today. Imminent restart of Sinclair’s 160,000 b/d El Dorado, KS refinery (from turnaround) is the likely factor pushing gas prices in OK/KS down 3-6cts/gal today.
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EIA stats are particularly lumpy with gas demand dropping 625k on the week and 566k yoy; distillate demand of 4.2-mbd almost certainly overstated and up 475k on week and 627k yoy. High freight costs are beginning to inhibit product exports.
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Suddenly, the Ukrainian attacks on Russian refineries represent hounds that are no longer barking. Last successful attack was October 8. But it looks like the Houthis are ramping up their wailing in the Persian Gulf and Red Sea. Stay tuned.
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Great Lakes pump prices love extremes. Thanks to another 6-12cts/gal drop in gasoline blendstock prices and plummeting ethanol costs ($1.83/gal in Chicago), you may see lots of sub-$4/gal gasoline in OH, MI, KY, IN, IL, MN, and WI in the next few days.
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Pre-sanction 2021 US importers of Russian petroleum were Atlantic, BP, Chevron, XOM, Glencore, Gunvor, Marathon, Monroe, Motiva, Neste, Par, PBF, P66, Reliance, Tartan, Trafigura, Valero, and Vitol.
There's Russian diesel headed to the US but which companies will be intrepid enough to import the barrels? Washington DC lawmakers warned of potential consequences via letters sent today to top brass at API and AFPM.
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Californians waking up to a sub-$6/gal gasoline price for the first time in months ($5.995/gal). But Golden State diesel still commands a lofty $8.44/gal.
There's Russian diesel headed to the US but which companies will be intrepid enough to import the barrels? Washington DC lawmakers warned of potential consequences via letters sent today to top brass at API and AFPM.
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Negotiations between about 800 locked-out workers and BP's Whiting IN refinery management were due to restart today some 7 months after the initial strike. No word yet on any progress.
