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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: johnlw who wrote (8923)	2/26/2005 3:48:40 PM
From: Taikun	Read Replies (2) \| Respond to of 11633

JW, In N. America aggregate oil demand is rising, including gasoline. Heavy oil refining capacity is tight but so is overall capacity, as I understand it from talking to a Canadian energy analyst in Vancouver last week. Producing light crude helps the situation in that crude can be processed at more refiners. The main problem seems to be that if aggregate N. American crude demand rises, say 500,000bpd, and all of that can be supplied in the form of light sweet crude from oil sands projects, there is no spare refining capacity to refine the oil into gasoline. So far, this isn't a peak oil problem, where we take oil from, say, Mexico and replace with oil sands oil. This is a growing demand problem where the demand can be met with oil sands oil except there is no addl refining capacity to refine this extra 500,000 bpd required by the market. The point to remember is that we are talking about meeting increasing demand, we are talking about meeting that demand from oil sands production, and while we are putting the pipelines and upgraders in place, we are not building excess refining capacity. Who is going to refine all this extra oil sands oil? D