Oil Prices: Key To Biodiesel Profitability
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Oil Prices: Key To Biodiesel Profitability “It ain’t right, but it’s true!” James L. Williams WTRG Economics. Canola Council of Canada March 21, 2007 Westin Bear Mountain Victoria. Market Linkage Biodiesel Diesel Heating Oil Crude Oil. Food or Fuel Historical Precedence

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Canola Council of Canada March 21, 2007 Westin Bear Mountain Victoria

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Oil Prices: Key To Biodiesel Profitability“It ain’t right, but it’s true!” James L. WilliamsWTRG Economics

Canola Council of CanadaMarch 21, 2007

Westin Bear Mountain Victoria


  • Market Linkage

    • Biodiesel

    • Diesel

    • Heating Oil

    • Crude Oil


  • Food or Fuel

    • Historical Precedence

      • Cowboys Fed Their Horses

    • Current issue

      • Mike’s decision


Beer: Now Cheaper Than Gas


  • Factors in Oil Prices

    • Production (Economy & Policy)

    • Consumption (Economy & Policy)

    • Stocks

    • Production Capacity


Politics, Geopolitics & Nature

  • Supply Interruptions

    • Wars

    • Natural disasters

  • Consumer Policies

    • Taxes

    • CAFE

    • Import duties / restrictions

    • Price controls

  • Producer / OPEC Policies

    • Quotas

    • Embargos

    • Taxes


Prices have little impact on short term consumption.Government policy and the economy dominate.


Distillate = Diesel & Heating Oil


Residual Fuel: Bunker Fuel, Power Generation & Heating


Do high prices cause recessions or do recessions cause low prices?


World Production: Doesn’t Make Sense


Non-OPEC Production: Slow Response to Price Changes


Iraq / Iran War

Revolution


CoalitionInvades

Kuwait InvadedGulf War

Iraq / Iran War


Kuwait InvadedGulf War


SwingProducer

Iraq / Iran War


Historically Oil Price Inversely Related to Stocks

Inventory Price Relationship went off track in the last 3-4 years


Lower Capacity Higher Production


Low Spare Capacity Increases Risk


OPECCapacity, Production & Spare Capacity


  • Future

    • Excess Production Capacity

    • Saudi Arabia

    • Russia

    • China

    • Venezuela

    • Recession

    • Alternate fuels

    • Conservation


  • Product Markets

    • Gasoline

      • MTBE to Ethanol

    • Distillates

      • Heating Oil

      • Diesel

        • Ultra Low Sulfur


  • Risk

    • Capacity

    • Russia

    • Mexico

    • Iran

    • Nigeria

    • Iraq

    • Venezuela

    • Hurricanes

    • Economy


  • Login