With over 100 years of experience in the fuel industry, we believe there is no question or problem that Portland cannot answer or help you solve. We want to hear your questions and issues with regards fuel buying, fuel quality, fuel consumption, petrol forecourts, grades of fuel, refining etc, etc, etc. The list really is endless and we would like you the fuel user to test us so we can help you!
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Read our forum questions below:
September 20, 2017 Is there a time lag between movements in the price of Brent Crude and then corresponding movements in the price of Refined Products? Once the refinery has purchased the oil, how long does it tend to take to turn that barrel into Diesel for sale?
This is a question that vexes a lot of people and not for good reason. A superficial answer would be about 1-2 weeks, with for example Crude from the North Sea being landed at a UK Refinery (2 day voyage), stored in refinery tanks (1-2 days), processed (1-2 days), back into storage (1-2 days), loaded onto a truck and then delivered to a petrol station (1 day). On top of that, you would need to add another 3-4 days if the product is to be sent from the refinery by pipeline / truck / small coastal ship to a fuel depot around the country, where there is another 2-3 days of storage before loading onto a truck and delivery to a petrol station. And then you have to factor in the vastly different consumption rates – at both depot and fuel station level – which means stock turnover can be anything from 2-3 days (busy urban sites) to 2-3 weeks (remote rural sites).
All of the above sounds complicated, but is nonetheless fairly logical. It is also only half the story! Whilst it explains the logistical time-delay in the correlation of prices from crude oil. it does not explain any market values of the refined products themselves. In reality, diesel, petrol and every other refined grade have their own market value that does not necessarily follow the price of oil. So for example, if there is a large draw-down of gasoline stocks in the USA (let’s say at the beginning of the US Driving Season = May / June), then you could easily have a situation whereby the price of Gasoline goes up (increased demand), whereas the price of crude stays static or even on occasion goes down (because demand for crude oil elsewhere in the world has softened). Another good example of this, is Heating Oil in Europe (effectively diesel) which can increase in price at the beginning of the winter (around November), completely independently of movements in crude price.
So in a nutshell, there is a correlation between crude prices and refined prices and in the UK that correlation has a time lag of about 2 weeks. But the correlation is not guaranteed and can frequently disappear entirely.
This question comes from Carl in Liverpool.
September 18, 2017 A good and interesting report, but possibly disagree with the environmentally friendly angle of manufacturing oils that end up dumped in landfill, oceans and spend the rest of eternity clogging up and damaging food chain and nature’s delicate ecosystems.
We can’t argue with the point you make here Finley, as crude oil derived plastics – unceremoniously dumped – are the bane of many a natural landscape. It’s just in our world of oil trading And supply, our environmental judgement is often purely viewed through the lens of how much CO2 and other emissions are generated. Here, plastics and other oil manufactured products clearly beat fossil fuel combustion for transport. But equally clearly, that doesn’t exactly make them “green” products!
From Finley in Cornwall, who responded to our July 2017 “Summer Special”.
May 15, 2017 Perceptive piece about the long-term future of oil heating, but it is worth noting that Denmark only banned oil heating in areas where there is mains gas, which basically means that rural areas can continue with oil heating. Plus the ban started in July 2016 and not in 2013.
Thanks Jeremy. Very interesting that the originally earmarked 2013 ban was delayed until 2016 – almost certainly down to the lobbying efforts of the European Heating Oil Association (http://www.eurofuel.eu/). Also, by allowing heating oil to continue in rural areas of Denmark, the post-ban position is not much different to the UK – where our very extensive gas grid (mains gas) ensures heating oil is only really prevalent in the countryside.
After our last Oil Market Report on the future of Heating Oil, we were contacted by Jeremy in Suffolk who made the above points on the heating oil ban in Denmark.
April 19, 2017 What do you think of nuclear and do you know much about actual costs? There is a credible environmental argument that now says nuclear is a costly diversion, that will not be able to deliver at scale if we want to meet our 20 year emissions targets (COP 21). Why not put the money into renewables instead?
Thanks for getting in touch Duncan and in truth, we are not experts on nuclear power. But for us, nuclear has to be part of a balanced energy picture. The technology already exists, it has limitless potential and of course has zero carbon emissions. In terms of cost, our loose understanding is that new nuclear power stations are massively expensive to build but are less expensive (or at least more proportionate) to run. So up-grading existing nuclear power stations does look to be an attractive option.
With regard renewables, they are thankfully playing an increasingly significant part in global energy programmes (eg, 30% in Germany) and things like Elon Musk’s “Powerwall” have big potential. But there is little out there – other than hypothetical modelling – that says renewables can meet the global energy needs of 8bn people. And even if sufficient generation wasn’t a problem (which it still is), there is still the massive issue of renewable energy distribution and how renewables feed into existing power networks.
Also with regard nuclear, a rather Machiavellian view would be that if the imminent problem is climate change, then nuclear is the only solution – as the problems associated with nuclear are either one-off and avoidable (accidents) or 100 years down the line (waste and disposal).
Finally, even if we do meet our COP 21 climate change targets, we will still be experiencing a net increase in global emissions. Therefore the 20 year “deadline” is an arbitrary line in the sand, such that investing in nuclear to reduce emissions is still a good thing to do irrespective of whether it is done to meet emissions targets or simply to reduce emissions.
We got this question from Duncan in Oxford on nuclear energy (following on from our April 2017 Report on the French Presidential Election and the place Nuclear Energy has in French Energy Policy);
April 7, 2017 When we leave the EU, will our emergency oil stocking obligations disappear?
Good question, because on the surface, our oil stocking obligations (65 days of emergency stock) are set by the EU. Logically then, when we leave the EU, that obligation will disappear and would in theory be replaced by new regulations set at UK level. However, Great Britain is also a member of the International Energy Agency (IEA) – a sort of energy club for the world’s richest nations (see February’s Oil Market Report) and they have a duplicated oil stocking obligation, which also amounts to 65 days. So on leaving the EU, the UK’s obligations in this area will not disappear. So definitely an example of the legislative / bureaucratic “burden” remaining in place post-Brexit.
This post-Brexit question came from one of our staff, so we thought we would share it.
I know you are an oil company but in the whole of your report on French Energy and the French Election, there was not one single mention of renewables. Hardly a balanced report!
Fair point Estelle, but we do like to keep our reports short (otherwise nobody reads them!) and therefore have to focus on the main issues. And the truth is that in France, renewables do not play a big part in the overall energy picture, with only 17% of energy being generated from renewable sources. This compares unfavourably to both the UK (25%) and Germany (30%), although the latter does have its own “dirty secret” in its significant reliance on heavily polluting lignite (brown coal) for power generation.
The French Government periodically has the gall (or should that be Gaul…!?) to classify Nuclear Power as renewable energy source, which may be correct technically, but clearly is not what most of the rest of the world understands as renewable. But France does have the world’s largest tidal energy dam (“La Rance” in Brittany) which can be read about in our Oil Market Report from Sep 2014.
We got this question / comment from Estelle, following our March 2017 Oil Market Report on French Energy
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