THE END OF CHEAP OIL

Who says so? Standard and Poor’s. Where can you read about it? Oil and Gas Journal. Is the message starting to come across? Hopefully...

S & P’s: Refiners must turn low-quality crude into high-quality fuel
February 27, 2007 (Oil and Gas Journal)

- The global refining industry faces the challenges of upgrading its refining capacity to produce less-polluting fuels while processing increased volumes of poorer-quality crude oils, Standard & Poor's said in a recent special report…

- More heavy and sour crude is coming onto the market, and the complex process of refining this crude into fuels that meet stricter low-sulfur regulations is costly…
A growing price differential between light and heavy crudes will make it harder for refiners as they process greater volumes of lower-quality crude…refiners must find the capital to fund enormous construction demands…
- Oil and natural gas prices continue to be characterized by remarkable volatility, yet the impact has been minimal to the US economy so far…Oil prices would have to go higher than they did in the past to damage the economy…Greater energy efficiency means oil is not as big a percentage of household spending…[expect] oil prices to fluctuate widely…absent major geopolitical events…