Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Very pleased to be joined again by Patrick de'han, who
is head of petroleum analysis for gas Buddy and proprietor
of his own substack called Fuel Insights, And I think
he is really the best sort of public facing expert
on oil and gas and diesel prices and stuff like that.
(00:21):
So Patrick, first, let me start with what's obviously the
most important question of the day, and that is, what
is the strangest thing You've ever eaten?
Speaker 2 (00:30):
The strangest thing I've ever eaten? Yeah, boy, wait to
throw me off this morning. I don't know the strangest
thing I've ever eaten. Man, it's got to be overseas somewhere,
probably some form of seafood which I was an Asian.
I'm trying to remember what the name of it was.
(00:51):
It's one of those things you put in your mouth.
The texture is kind of weird, and it's like, don't
tell me what it is until I eat this, just
because my brain is probably gonna have a tough time
I'm processing it.
Speaker 3 (01:01):
Hm.
Speaker 2 (01:02):
But wait, one was that I don't even remember what
it was. It was like four or six years ago.
It was some Japanese seafood and I don't remember the pronunciation.
Speaker 1 (01:11):
All right, next time I have you, you'll have to
give us give us the answer.
Speaker 3 (01:13):
But a seafood? How'd you look it up? Yeah?
Speaker 1 (01:16):
Okay, I want to talk about two primary categories with you,
local gasoline prices here in Colorado and then Venezuela stuff
and Gina will have questions for you too.
Speaker 3 (01:27):
Yesterday I filled up for.
Speaker 1 (01:30):
Dollars seventy nine a gallon in Denver without any like
special discounts or anything. That was just the number on
the sign on the gas station. And I did see
your note over at gas Buddy about gasoline being the
lowest it's been since twenty twenty. So talk to us
just a little bit about gas prices nationally and then
(01:51):
why Colorado.
Speaker 3 (01:52):
Is so much cheaper than the national average.
Speaker 2 (01:55):
Well, so, Nashley, we started the year at the national
average about two seventy four a gallon on.
Speaker 3 (02:00):
It did go up a little bit, yes, there was
saw some increases.
Speaker 2 (02:03):
That's the lowest start to a new year since twenty
twenty one, when prices were going up because of the pandemic,
not down. This year, we're kind of continuing to move lower.
Speaker 3 (02:14):
It's going to be the cheapest twenty twenty six. We
anticipate the cheapest year since twenty twenty.
Speaker 2 (02:20):
When it comes to filling your tank up with a
national yearly average of two ninety seven a gallon, you
might be saying, well, hey, the national average already at
two seventy four.
Speaker 3 (02:28):
Yeah, we do expect prices to go up this spring
and summer, as they always do.
Speaker 2 (02:31):
Colorado's certainly you know the place to be right now.
Speaker 3 (02:34):
The cheapest, the second cheapest state in the nation.
Speaker 2 (02:37):
Colorado, averaging two dollars and thirty two cents a gallon.
Looking at prices, there's been this price we're brewing for
a couple of months, and it hasn't gone away.
Speaker 3 (02:48):
A couple of stations just duking it out.
Speaker 2 (02:50):
A quick trip, a Shell, a Murphy Express, a Murphy USA,
a Sam's Club at Costco right now. The lowest price
in the country in Denver a dollar and fifty one.
That's almost forty cents below cost I don't know how
these stations can stomach this for so long. Why Colorado, Well,
you have a lot of access to cheap Canadian crude oil,
(03:12):
those blends of crude oil coming down directly from Alberta
to the sun Core refiner in commerce city, and because
you're in Colorado, there's not a whole lot of markets
where this gasoline can be shipped out of supplies high.
But the inability to move this gasoline out of the
region means that refineries are stuck with that they have
to discount it. So some of the cheapest prices in
(03:34):
the country right now are in Denver in Colorado, and
do enjoy it. Though, because this situation could turn around
as we get closer to spring, retailers are going to
have to essentially discount that remaining winter gasoline before we
start the transition.
Speaker 3 (03:49):
And it's probably going to be a little bit of
a sticker.
Speaker 2 (03:52):
Shock when we start making that transition to summer gasoline
here in about six weeks time.
Speaker 1 (03:57):
All right, we got about four minutes left. I got
one quick follow up for you, and then I want
to go to Gina. But are you saying that the
gas station that's selling it at let's say, I think
you mentioned a dollar fifty one? Do you believe the
gas station itself is taking a loss on that gasoline
or is the loss or lack of profit happening at
the refiner level.
Speaker 2 (04:16):
No, absolutely, this one's happening at the station level. This
station's probably about thirty to forty cents below cost, and
so are the other stations around. At the Murphy Express,
the Shell, Yeah, they're hemorrhaging money, and I don't know
how they're able to stomach such a significant loss for
such a you know, they've been below cost for probably
over a month now.
Speaker 4 (04:37):
The Murphy Express is where I always go, and I
always have the same question.
Speaker 3 (04:40):
I have no idea how they're able to do it,
but I'll keep filling up here.
Speaker 4 (04:43):
But Patrick, let's tie this to the national story. Everyone's
talking Venezuelan oil right now, and just curious of if
you have any ideas speculation of local impacts. Oil company
is starting to invest in Venezuelan oil, and then how
much could we really see it or feel any impacts
low when that happens anytime soon or I'm talking years
(05:03):
from now, Yeah, it's going.
Speaker 3 (05:05):
To be years.
Speaker 2 (05:06):
You know.
Speaker 3 (05:06):
There's a lot of excitement.
Speaker 2 (05:07):
I mean, the President's talked about the US oil sector
going into Venezuela and helping.
Speaker 3 (05:12):
To increase production.
Speaker 2 (05:13):
But the reality is, I mean, Venezuela still has rolling
blackouts on some days, so there need to be billions
of dollars invested here. The biggest thing, though, is we
still haven't seen meaningful shifts in the regime, right We're
still talking about hard liners all up and down the
administration in Venezuela. Maduro may be gone, but his loyalists
are still there. What is this going to look like?
Speaker 3 (05:35):
Is there still going to be a hard line against
the US.
Speaker 2 (05:38):
You know, oil companies got burned back in two thousand
and seven under Hugo Chavez when Chavez basically sees the
assets of Exxon Mobile and Conico Phillips. So oil companies
probably are not chomping at the bit of potentially spending
billions of dollars in a country where the regime still
may be loyalists to Maduro. There's a lot of questions here,
and a lot of this is yes years away from
(06:00):
potentially stabilizing the price of oil, not necessarily even driving
at lower the.
Speaker 3 (06:06):
Stuff I'm reading.
Speaker 1 (06:07):
Patrick has a very, very wide range of numbers in
terms of the estimate of the cost of production in Venezuela.
And one of the things that people don't talk about,
and Trump never seems to talk about, is whether the
current price of oil justifies spending money to get more
oil out of the ground in a given situation. Right,
there's some places where it's much cheaper to get oil
(06:27):
out of the ground, some places where it's more expensive.
Would it be profitable to even try to get the
oil out of the ground in Venezuela with oil let's
say in the high fifties.
Speaker 2 (06:38):
Well, I don't think the investment is worth The risk
is worth the investment, right, because like you said, I
mean if oil prices were elevated, yes, and oil companies
may be able to take the risk.
Speaker 3 (06:48):
But you know, for such little return on investment.
Speaker 2 (06:51):
I mean this Venezuelan oil to your point, you know
WTI crudle today's fifty eight dollars a barrel. This Venezuelan
oil on the open market might sell for forty five.
Speaker 3 (07:00):
It's so heavy it's hard to move.
Speaker 2 (07:02):
You need it to cut it with dilliu in essential
to make it a lighter product to get it to move.
I mean this is literally like gelatinous oil. It's so
heavy it's hard to move. There's a lot of impurities.
So I mean, at the levels we're talking about, you know,
you'd need thirty years to recoup an investment, and that's
if your investment doesn't get seized by a new hardline
(07:23):
loyalist regime in Venezuela.
Speaker 3 (07:25):
So, you know, there's been.
Speaker 2 (07:27):
So much said, so much optimism that I want to
have that oil is going to liberate Venezuelan's but you know,
the realistic he says, this is going to be a
hard and long road to recovery for Venezuela, and there's
not much incentive right now with the market and oil
prices being at multi year lows.
Speaker 1 (07:46):
Patrick Kahan had a petroleum analysis for gas Buddy, proprietor
of his own substack.
Speaker 3 (07:50):
Called Fuel Insights.
Speaker 1 (07:53):
Not that it really matters, but I agree with everything
you just said, and I think there's a little too
much optimism out there, especially in the Trump administry, about
how this is going to play out. I mean, I
hope it works out well, but there's a lot of headwinds. Patrick,
thanks as always for your time, my pleasure, Thanks for
having me
Very pleased to be joined again by Patrick de'han, who
is head of petroleum analysis for gas Buddy and proprietor
of his own substack called Fuel Insights, And I think
he is really the best sort of public facing expert
on oil and gas and diesel prices and stuff like that.
(00:21):
So Patrick, first, let me start with what's obviously the
most important question of the day, and that is, what
is the strangest thing You've ever eaten?
Speaker 2 (00:30):
The strangest thing I've ever eaten? Yeah, boy, wait to
throw me off this morning. I don't know the strangest
thing I've ever eaten. Man, it's got to be overseas somewhere,
probably some form of seafood which I was an Asian.
I'm trying to remember what the name of it was.
(00:51):
It's one of those things you put in your mouth.
The texture is kind of weird, and it's like, don't
tell me what it is until I eat this, just
because my brain is probably gonna have a tough time
I'm processing it.
Speaker 3 (01:01):
Hm.
Speaker 2 (01:02):
But wait, one was that I don't even remember what
it was. It was like four or six years ago.
It was some Japanese seafood and I don't remember the pronunciation.
Speaker 1 (01:11):
All right, next time I have you, you'll have to
give us give us the answer.
Speaker 3 (01:13):
But a seafood? How'd you look it up? Yeah?
Speaker 1 (01:16):
Okay, I want to talk about two primary categories with you,
local gasoline prices here in Colorado and then Venezuela stuff
and Gina will have questions for you too.
Speaker 3 (01:27):
Yesterday I filled up for.
Speaker 1 (01:30):
Dollars seventy nine a gallon in Denver without any like
special discounts or anything. That was just the number on
the sign on the gas station. And I did see
your note over at gas Buddy about gasoline being the
lowest it's been since twenty twenty. So talk to us
just a little bit about gas prices nationally and then
(01:51):
why Colorado.
Speaker 3 (01:52):
Is so much cheaper than the national average.
Speaker 2 (01:55):
Well, so, Nashley, we started the year at the national
average about two seventy four a gallon on.
Speaker 3 (02:00):
It did go up a little bit, yes, there was
saw some increases.
Speaker 2 (02:03):
That's the lowest start to a new year since twenty
twenty one, when prices were going up because of the pandemic,
not down. This year, we're kind of continuing to move lower.
Speaker 3 (02:14):
It's going to be the cheapest twenty twenty six. We
anticipate the cheapest year since twenty twenty.
Speaker 2 (02:20):
When it comes to filling your tank up with a
national yearly average of two ninety seven a gallon, you
might be saying, well, hey, the national average already at
two seventy four.
Speaker 3 (02:28):
Yeah, we do expect prices to go up this spring
and summer, as they always do.
Speaker 2 (02:31):
Colorado's certainly you know the place to be right now.
Speaker 3 (02:34):
The cheapest, the second cheapest state in the nation.
Speaker 2 (02:37):
Colorado, averaging two dollars and thirty two cents a gallon.
Looking at prices, there's been this price we're brewing for
a couple of months, and it hasn't gone away.
Speaker 3 (02:48):
A couple of stations just duking it out.
Speaker 2 (02:50):
A quick trip, a Shell, a Murphy Express, a Murphy USA,
a Sam's Club at Costco right now. The lowest price
in the country in Denver a dollar and fifty one.
That's almost forty cents below cost I don't know how
these stations can stomach this for so long. Why Colorado, Well,
you have a lot of access to cheap Canadian crude oil,
(03:12):
those blends of crude oil coming down directly from Alberta
to the sun Core refiner in commerce city, and because
you're in Colorado, there's not a whole lot of markets
where this gasoline can be shipped out of supplies high.
But the inability to move this gasoline out of the
region means that refineries are stuck with that they have
to discount it. So some of the cheapest prices in
(03:34):
the country right now are in Denver in Colorado, and
do enjoy it. Though, because this situation could turn around
as we get closer to spring, retailers are going to
have to essentially discount that remaining winter gasoline before we
start the transition.
Speaker 3 (03:49):
And it's probably going to be a little bit of
a sticker.
Speaker 2 (03:52):
Shock when we start making that transition to summer gasoline
here in about six weeks time.
Speaker 1 (03:57):
All right, we got about four minutes left. I got
one quick follow up for you, and then I want
to go to Gina. But are you saying that the
gas station that's selling it at let's say, I think
you mentioned a dollar fifty one? Do you believe the
gas station itself is taking a loss on that gasoline
or is the loss or lack of profit happening at
the refiner level.
Speaker 2 (04:16):
No, absolutely, this one's happening at the station level. This
station's probably about thirty to forty cents below cost, and
so are the other stations around. At the Murphy Express,
the Shell, Yeah, they're hemorrhaging money, and I don't know
how they're able to stomach such a significant loss for
such a you know, they've been below cost for probably
over a month now.
Speaker 4 (04:37):
The Murphy Express is where I always go, and I
always have the same question.
Speaker 3 (04:40):
I have no idea how they're able to do it,
but I'll keep filling up here.
Speaker 4 (04:43):
But Patrick, let's tie this to the national story. Everyone's
talking Venezuelan oil right now, and just curious of if
you have any ideas speculation of local impacts. Oil company
is starting to invest in Venezuelan oil, and then how
much could we really see it or feel any impacts
low when that happens anytime soon or I'm talking years
(05:03):
from now, Yeah, it's going.
Speaker 3 (05:05):
To be years.
Speaker 2 (05:06):
You know.
Speaker 3 (05:06):
There's a lot of excitement.
Speaker 2 (05:07):
I mean, the President's talked about the US oil sector
going into Venezuela and helping.
Speaker 3 (05:12):
To increase production.
Speaker 2 (05:13):
But the reality is, I mean, Venezuela still has rolling
blackouts on some days, so there need to be billions
of dollars invested here. The biggest thing, though, is we
still haven't seen meaningful shifts in the regime, right We're
still talking about hard liners all up and down the
administration in Venezuela. Maduro may be gone, but his loyalists
are still there. What is this going to look like?
Speaker 3 (05:35):
Is there still going to be a hard line against
the US.
Speaker 2 (05:38):
You know, oil companies got burned back in two thousand
and seven under Hugo Chavez when Chavez basically sees the
assets of Exxon Mobile and Conico Phillips. So oil companies
probably are not chomping at the bit of potentially spending
billions of dollars in a country where the regime still
may be loyalists to Maduro. There's a lot of questions here,
and a lot of this is yes years away from
(06:00):
potentially stabilizing the price of oil, not necessarily even driving
at lower the.
Speaker 3 (06:06):
Stuff I'm reading.
Speaker 1 (06:07):
Patrick has a very, very wide range of numbers in
terms of the estimate of the cost of production in Venezuela.
And one of the things that people don't talk about,
and Trump never seems to talk about, is whether the
current price of oil justifies spending money to get more
oil out of the ground in a given situation. Right,
there's some places where it's much cheaper to get oil
(06:27):
out of the ground, some places where it's more expensive.
Would it be profitable to even try to get the
oil out of the ground in Venezuela with oil let's
say in the high fifties.
Speaker 2 (06:38):
Well, I don't think the investment is worth The risk
is worth the investment, right, because like you said, I
mean if oil prices were elevated, yes, and oil companies
may be able to take the risk.
Speaker 3 (06:48):
But you know, for such little return on investment.
Speaker 2 (06:51):
I mean this Venezuelan oil to your point, you know
WTI crudle today's fifty eight dollars a barrel. This Venezuelan
oil on the open market might sell for forty five.
Speaker 3 (07:00):
It's so heavy it's hard to move.
Speaker 2 (07:02):
You need it to cut it with dilliu in essential
to make it a lighter product to get it to move.
I mean this is literally like gelatinous oil. It's so
heavy it's hard to move. There's a lot of impurities.
So I mean, at the levels we're talking about, you know,
you'd need thirty years to recoup an investment, and that's
if your investment doesn't get seized by a new hardline
(07:23):
loyalist regime in Venezuela.
Speaker 3 (07:25):
So, you know, there's been.
Speaker 2 (07:27):
So much said, so much optimism that I want to
have that oil is going to liberate Venezuelan's but you know,
the realistic he says, this is going to be a
hard and long road to recovery for Venezuela, and there's
not much incentive right now with the market and oil
prices being at multi year lows.
Speaker 1 (07:46):
Patrick Kahan had a petroleum analysis for gas Buddy, proprietor
of his own substack.
Speaker 3 (07:50):
Called Fuel Insights.
Speaker 1 (07:53):
Not that it really matters, but I agree with everything
you just said, and I think there's a little too
much optimism out there, especially in the Trump administry, about
how this is going to play out. I mean, I
hope it works out well, but there's a lot of headwinds. Patrick,
thanks as always for your time, my pleasure, Thanks for
having me
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