National Car Brokers investigate condensate oil and USA’s plans to export it.
Have you been keeping an eye on the Oil Markets? In 2014, the price of Oil fluctuated by over 50%! It continued to decline throughout 2015 and 2016. That is quite a collapse in pricing, and is going to have some serious impacts across the Auto Industry. Some potential impact areas include:
- Oil and Gas Sourcing
- Alternative Types of Oil and Gas
- Sporadic Prices At The Pumps
Since we have been trying to stay abreast of these changes, one of the more notable items that has emerged from the volatility is a new Condensate that is being exported from America. While not used in the USA, it is approved to ship to many international countries, so today I am going to investigate what this condensate is, and if it has any impact on what we have been seeing across the oil markets; on which our current Auto Industry is modelled after.
I started my search at the Wall Street Journal in their 2014 article titled, “What is Condensate?”
Alison Sider writes, “Bureaucrats in Washington D.C. are quietly tweaking the rules governing oil exports, and suddenly everybody’s buzzing about condensate.
What is condensate? It’s a type of ultralight oil that’s flowing in huge quantities out of shale plays from Texas to Pennsylvania. When underground condensate is mostly a gas, but it condenses into a liquid when pumped to the surface.
Even in liquid form, condensate is light and gassy. In fact, it has more in common with gasoline, but the U.S. has long treated it like all other oil, restricting its shipments overseas except in special cases like exports to Canada.
Condensate was the oil boom’s redheaded stepchild. The USA Commerce Dept. indicated that selling condensate abroad might be simpler than previously thought. By granting permission to two Texas energy companies to sell condensate abroad, the USA federal government cracked open the door that could lead to exports of unrefined oil previously prohibited under the longstanding export ban.”
While many see this as just another opportunity to get the foot in the Oil industry, I see this as a direct byproduct of the gas and oil decline, and potentially disruptive to how our current supply is being treated, since this Condensate is lacking some of the labelling requirements that help scientists determine exactly what it is. Alison’s article discusses that the varieties of oil are classified based on their API gravity, and other things such as viscosity, which is tied to gravity, and ultimately the grade of the Oil.
The topic has been addressed more recently, with some reports that US President Obama has lifted the Export Ban, or at least engaged in the classification of what can be exported, and what can’t. Conclusion: Condensate is going to be exported. What is it? More research needs to be done to find out what this is, and why is it being sold abroad but not being used domestically?
2016 and 2017 promises to be an exciting year in the Auto Industry with lots of News and Topics that will be covered in our blog, so stay tuned over the coming weeks to get more Industry news, and all the updates on new vehicles, pricing, reviews. Call now or get in touch with NCB for your next new vehicle and get onside with the Industry Experts. We can save you thousands on your newt new car purchase.