RE: Reality Check
Inthe previous post, we learned that, “Catalyst producers put the demand for molybdenum in their business as growing 8-11 percent annually” due to its “capability to reduce sulfur when used in catalysts.”One factor that is certain to compound the growth of that demand is reported in the news article below, where is it is shown that high sulfur heavy crude is playing a dominate role is the world’s petroleum markets.
From:Red Orbit
https://www.redorbit.com/news/business/1467771/sour_oil_beginning_to_dominate_worlds_supply/
Sour Oil Beginning to Dominate World's Supply
Posted on: Tuesday, 8 July 2008, 09:01 CDT
By Jack Money, The Oklahoman
Jul. 8--YEARS AGO, Oil Refiners Sought -- and were able to find -- barrels of light, sweet crude they could refine into every fuel the United States needs, such as gasoline, diesel and jet fuel.
Not so much anymore, and that could affect prices we pay for just about everything made out of petroleum products, analysts say.
That's because these days, just about any type of oil makes it to the refineries, including those with a heavier and more sour makeup.
But those types of oil are costly to refine.
Refineries must add capacity to handle these once less-preferable oils. While still able to be refined, sour oil must be put through an additional refining process, which reduces the amount of refinable oil and the amounts of products it produces. And that, in turn, could affect prices.
Sweet or sour -- light or heavy -- affects the oil's value to refiners.
The higher quality sweet can be tracked on the New York Mercantile Exchange, which lists Brent Crude -- standard grade oil from the North Sea -- and light, sweet crude. Brent Crude closed at $141.87 Monday, while light, sweet crude closed at $141.37.
Domestically, dozens of varieties of oil are produced, and wells inside of Oklahoma also produce sweet and sour blends, depending on where they were drilled. Various petroleum marketers post prices for those blends.
Today's production Although sour oil typically is worth less than sweet, industry officials say the cheaper crude is beginning to dominate the available worldwide supply. "We are switching to it (as a source of refined products) because sour oil is increasingly what is becoming available, as opposed to light, sweet crude," said Bruce Bell, chairman emeritus of the Mid-Continent Oil and Gas Association. "There's lots of sour crude available, but not only is it more expensive to refine, but the production process is more expensive too."
Chip Minty, a spokesman for Devon Energy Corp., said past world petroleum production featured lighter, sweeter oil. But today around the world, the oil being produced is becoming progressively heavier and more sour.
"In North America, the two largest oil producing regions we know of are producing heavy oil," Minty said. "The Lower Tertiary in the Gulf of Mexico's oil is heavier, and the oil being produced out of sands in Canadian Alberta also is heavy.
"So these refinery conversions that we are seeing, many of them are being driven by what is out there today and what they see coming on the horizon."
Many refinery expansions under way now are geared toward processing the more-sour oil, officials said.
Bill Holbrook, a spokesman for the National Petrochemical and Refiners Association, said some sour-oil conversions are happening because that is the oil that refiners have the best access to in the market.