First up, ZeroHedge:
OPEC’s new strategy to balance the oil market is to cut oil exports to the U.S., a move intended to drain near-record-high crude oil inventories.The contradiction arises because of the largest petroleum refinery in the U.S.
OPEC originally thought that six months of combined production cuts would be sufficient to balance the oil market, but the market still looks oversupplied. Not everyone agrees on this. The IEA has argued that we probably have already reached “balance,” which is to say, demand has caught up with supply. The energy agency says that the market is moving into a supply deficit situation in the second half of this year, if it hasn’t already.
But the problem is that the one metric that OPEC officials themselves have held up as the key barometer to watch is the level of global crude oil inventories, rather than the immediate supply/demand balance. And on that front, they sort of shot themselves in the foot by ramping up exports just ahead of the implementation of the cuts late last year....MORE
Motiva's 603,000-barrel-per-day Port Arthur, Texas refinery is engineered for Saudi crude, not Bakken light or the goop that is going to be coming down the Keystone XL,
And Motiva is owned by Saudi Aramco. We've mentioned it a few times over the years:
Saudis Sending Seven Tankers to Begin Stockpiling Feedstock for Soon to Be Largest Refinery in the U.S., Motiva (RDS)
When the Motiva Port Arthur expansion is complete later this year its 600,000 Bbl/day capacity will surpass XOM's Baytown refinery's 572,500 and make it the fifth largest in the world....
Big Problem at Aramco/Shell Motiva Refinery So Saudi's Stop Sending Crude
“North American Crude and Condensate Outlook”: What Will U.S. Refineries Use as Feedstocks?
Price War: "Texas Refinery Props up US Saudi Imports"
Oil and Conspiracies: Saudi Exports to the U.S.
And here's the contradiction:
From the Houston Chronicle's FuelFix, May 26:
Saudi Arabia’s Motiva plans for billions in Texas growth
Saudi Arabia’s Motiva Enterprises said it plans to spend billions of dollars more to expand its Port Arthur Refinery — already North America’s largest — and grow more in the petrochemical and refining sectors.
Motiva, which finalized its divorce from Royal Dutch Shell in the beginning of May, said it plans to spend close to $18 billion in the U.S., largely along the Gulf Coast, within the next five years.
Although scant on details, this comes after Motiva already expanded the Port Arthur Refinery in recent years. Motiva emphasized it will continue to expand its crown jewel asset in Texas near the Louisiana border.We'll be back with more tomorrow.
Motiva, which operated as a joint venture between Saudi Aramco and Shell for nearly 20 years, is now purely a Saudi venture with a growing headquarters in downtown Houston. The Motiva growth is intended as part of an overall Saudi strategy to diversify its global footprint, including substantial growth in Texas....MORE