What's up with oil? People keep asking me to tell them what I know. I know that folks in the oil biz are pretty tight lipped and not saying much right now, but isn't that what we expected? I'm seeing and hearing admissions of problems with a trend of refining problems that has been moving slowly upwards. Usually though the refinery boys can tell you what their problem is over a cup of coffee. Not now. If you ask about Y2K you get a funny look and a glance away and some mumbling about "well, there's some funny little problems, but we can't really talk about it, or I can't really say for sure but we've not been having normal problems." These are the guys that used to be able to tell ya straight up, "Oh, we've had a this (fill-in-blank) or that (fill-in-blank) problem, but nothing too serious." The serious stuff,like after an explosion, when investigations are underway... people shut up. This is the way it is now, yet we've not had any catastrophic incidents. So this is what I mean by tight lipped.

Weather is mild and this has greatly minimized troubles for refineries that have had shut-downs because zero degree weather isn't around to exacerbate & complicate repairs at refineries. "Springtime in January. Who'da thunk it?" When I contemplated the potential weather factors I could have hardly anticipated the weather would be this mild. Even in a worst case scenario at rollover, the weather would have been a mitigating factor as it turns out.

Problems still abound in refining, but remain manageable on the surface at least. I understand that a number of refinery embedded systems had their clocks rolled back for now, to buy more time to fix problems at staggered intervals. I didn't figure that they could get away with this and survive, but it seems that they have been able to do this for now. Remember the CEO that collaborated on the NIST report about embeddeds. It was released in late November? Well, apparently his comments a few days before rollover suggesting the notion of turning back the clocks may have been well-heeded at least perhaps so in the oil industry anyway. But as I understand it, it is a short term solution but hey, maybe it could work. It has certainly bought time and kept things from crashing simultaneously.

I've been getting reports of problems at the wellheads in Texas including one source out of Texas who is well connected but can't provide me any details as yet but says there are problems and that its too soon to calculate the effects plus there are off shore problems too...but the problems are not as catastrophic (yet) as first expected. We still don't know how much oil well production has been affected. Hearing reports of "isolated" instances of problems that involve "temporary" fixes... other fixes thought to be permanent fixes. This has also been heard by at least a few others also. One Stock Market analyst is apparently getting similar indicators in the oil patch also. How serious are these? Frankly the information is slim, it's secondary at best and no one wants to talk much. Not a good sign IMHO but don't jump to premature or catastrophic conclusions. We just have enough indications to know that there are problems, they're not catastrophic, not yet anyway and they are apparently persistent in at least some instances.

There were apparently some pipeline problems that have been temporarily "worked around" for now.

I've heard of a couple of sources indicate to me second and third hand info of loading dock problems and even reported tanker problems but apparently not severe enough to be forced into public scrutiny. I don't know what to make of these reports.

As we are now midway into week 2 of the post rollover period, we are a far cry from being through the worst of the time period. Yet as I stated about 10 days ago, the severity of crisis has I think been reduced to no worse than a "5" level. We've seen a growing trend of refining problems. Will this trend continue to grow? We don't know. So far, most problems have been manageable and limited to a maximum of a week of disruptions so far. However some refineries just can't get rid of their problems, with enough minor glitches still occuring with enough frequency to keep from ramping up to preferred production levels.

One thing that seems to be developing is that many refineries are apparently experiencing or announcing refining capacity shrinkage. This is especially true in Asia. Shell in Singapore and also Exxon, (I think it was Exxon) announcing their refineries were cutting back for the next year due to what they claim was declining demand??? OH REALLY??? Hmmmm. Asia was already recovering from its 2 year recession and oil demand had risen. And now suddenly we see refineries cutting back to only half capacity or less? Somehow, I don't think this passes the smell test. Frankly, I'm surprised the PR boys couldn't come up with something better. I mean, they get paid big dollars to do this and play golf too. Obviously golf has been more important, what with all the nice weather. At any rate, I strongly suspect the reason for production cutbacks has more to do with production problems (related to Y2K incidents) rather than a concern for over-supply.

The oil industry has always been very tight-lipped about it's internal production process problems and with Y2K we can't expect anything different. We're not seeing forthcoming statements of problems and with no other industry being forced to admit problems (YET) the oil industry will be under no compulsion to change its ways and become candid about Y2K problems.

Something seems to be up because it appears "insider's money" within the oil industry is "buying" oil right now on the markets. This shouldn't be happening because inventories are supposed to be "up" with excess supply. When a market has excess supply its price normally drops. So why didn't oil do the real deal drop? I mean since rollover oil has in reality only taken a minor diip in the large scheme of things. Right now, I'd think we should be seeing $20.00 oil. But today we're up to over $26.00 pb. Does this mean the market's are telling us something now. It would seem logical to say yes, but I don't think so. I think its possible but really it's too early to tell if insiders are buying because of Y2K related problems. It may be that insiders are buying because they are indeed actually seeing production problems at the wellhead or at the refining levels or both. I'd be more inclined to think it would be at the wells because refining poblems would mean a gult of oil if it there were significant refining problems but no crude oil production difficulties.

1. The whole oil situation is getting "curiouser and curiouser" as they say. It still bears watching. We don't know how many wells have gone down and no one is talking for the record.

2. The end of the month data processing for oil wells is going to be a critical point. How much oil did that well pump out? Will it give an answer? Will the Answer be accurate? And then... what will happen during the transition as the cache overloads? etc.? Well this remains to be seen, considering every well is uniquely customized.

3. Refineries are experiencing an upward trend in problems. Usually in January in the past, most refining problems were strictly related to severe cold weather. Minus 30 degree weather or minus 10 degree weather can be a real problem for a refinery. We've not had such a weather-related problem in any of the refineries this year because the temps have been spring-like. OH, are we really in winter? Or maybe when we rolled over we leaped forward into March already? One thing for sure is that January doesn't normally see much in the way of refinery problems apart from cold weather factors. Remove the weather from the scenario and we seem to be having an inordinate number of refinery problems for this time of the year.

Anyway, the track record shows an upward trend of problems. Will the trend continue to escalate or level off or decline? It's too early to say just yet. Many of the embedded systems problems that may have developed are still unknown even to the operators, and hidden while waiting for the opportunity to spring up like a jack-in-the-box surprise. Again by mid-Feb we should have a much better idea. I can't foresee us not getting solid, trending--data one way or the other by mid-March. I don't think we have to wait til May or July to know about oil.

Meanwhile, for folks asking about Natural Gas I've had to say that my contacts are somewhat limited. I do know that in looking at the list of stories today we're beginning to see a surge of problems here but I don't have any contacts who know enough to comment on these developments. I suspect that the cache in the embedded systems of the gas pipelines are beginning to cause big problems...but at this point its just a guess based upon what I've heard from the embedded systems experts in describing how the system overloads with problems...See the TAVA report citation in my final post of 1999 in the oil industry section threads. There you can read for yourself how embeddeds can overload on a slow buildup that may take a month or more to become known even though it started at midnite on rollover. As that wise sage of the baseball diamond, Yogi Berra once said: "It ain't over, til its over." and folks we're still in the top half of the first inning. It could be a long game (or not) but one thing is for certain...there's still a long ways to go.

That's it folks. Don't expect to hear much solid information on oil for at least 3 to 4 weeks. I figure it will take a week or so after the first of the month for any problems to slowly trickle their way out to the world...unless its a catastrophic event. Explosions are a little hard to cover-up. An oil well shut down is a quiet story that never gets published. We could have a fair amount of shut downs now and not know about it. Until then, or unless I get substantial news positive or negative, I probably will not post anything further on oil.

-- RC (racambab@mailcity.com), January 12, 2000

Answers

Thanks for the up-date post RC. much appreciated

-- kevin (innxxs@yahoo.com), January 12, 2000.

Thanks RC. Your posts are always appreciated. I guess we will "wait and see."

-- JoseMiami (caris@prodigy.net), January 12, 2000.

Hey, I'm in the golf industry in the "real world" -- watch ya mouth!

Thx for the usual careful update.

-- BigDog (BigDog@duffer.com), January 12, 2000.

Yes, RC!! Thanks for the update. Keep 'em coming. ;o)

"Arby"

-- Arby (itmustbethecheese@yahoo.com), January 12, 2000.

And some say we should shut the board down (or turn it into a stock board)!!!!!!

Thank you for an excellent and timely analysis.

Please keep us updated as need be. In the meantime, I am following your new oil board.

-- Me (me@me.me), January 12, 2000.

Thank you R.C.

Your posts are always thought provoking.

I suspect oil prices to move if real problems persist.

-- Bill P (porterwn@one.net), January 12, 2000.

I guess its not really over until RC's fantasies are over. This could go on for years, lol.

The industry didn't "suddenly" go to manual due to the NIST warnings. Just one in a million absurd claims in the naked city...

Wake up, smell the coffee, the embedded systems "crisis" is over.

Regards,

-- FactFinder (FactFinder@bzn.com), January 12, 2000.

Correction, the claim was that the oil industry may have "set the clocks back" due to the November "warnings".

And I'm still looking for those major refinery shutdowns due to y2k, the ships in trouble, and other RC doomerisms that never happened, and will happen. The rest of them may have forgotten your claims RC, but I haven't. Your a nut to not stop when you've already demonstrated your idiocy - are you trying for a record????

Regards,

-- FactFinder (FactFinder@bzn.com), January 12, 2000.

Thanks RC,

I appreciate the information. It is appaling that no major news organization has really dug into the oil situation.

Keep up the good posts.

-- No Polly (nopolly@hotmail.com), January 12, 2000.

Correction, the claim was that the oil industry may have "set the clocks back" due to the November "warnings".

And I'm still looking for those major refinery shutdowns due to y2k, the ships in trouble, and other RC doomerisms that never happened, and will happen. I will never be amazed at how some people can't bring themselves to stop spouting nonsense long after the rollover has proven their ignorance of Y2k in embedded systems.

Regards,

-- FactFinder (FactFinder@bzn.com), January 12, 2000.

Thanks RC. Everything has become "curiouser and curiouser" ;^)

-- Ashton & Leska in Cascadia (allaha@earthlink.net), January 12, 2000.

RC, You da man.

-- Mara (MaraWayne@aol.com), January 12, 2000.

This thread has particular relevance to me. It's about 7:15 p.m. our time and I'm catching up on the collective wisdom posted today (01122000) by the Forum participants. I'm surrounded by petrochemical refineries: literally. Very little is being said openly about problems related to Y2K in the petrochem setting.Probably not much will be publicized if it can be kept quiet because the Harris County economy depends on these babies. Now aside from Harris County's economic welfare, I'm interested because my family's safety depends on LACK of malfunction. So keep the posts coming. I didn't leave this area on 31December but I made sure the kids were a few miles away to celebrate New Years with other, more safely located family. I didn't overstock on emergency supplies, either. I've been through a couple of house detentions in plant emergencies, and realized that a major investment might have to be abandoned in the event of real problems during roll over phase if we had to evacuate. We have extra charcol, about 75 gallons of water and a few surplus dried goods. But the gas tanks stay capped and we subconsciously listen for the wail of the alert siren It's easy to minimize this aspect of Y2K unless you live with it. The refineries are as familiar to me as my childrens'faces but I am also aware of how devastating malfunction could be to the human=environment=machine ecology that we've built here.

-- mike in houston. (mmorris67@hotmail.com), January 12, 2000.

Factfinder,

You really need to change your name because you do NOT live up to it. Had you bothered to carefully check the facts you would have not made your statement:

"Correction, the claim was that the oil industry may have "set the clocks back" due to the November "warnings"."

ALLOW ME to cite the actual quote that I made:

"Remember the CEO that collaborated on the NIST report about embeddeds. It was released in late November? Well, apparently his comments a few days before rollover suggesting the notion of turning back the clocks..."

Now let me zero in on the key operative words:

"...his comments a few days before rollover suggesting..."

Again, as you are so wont to do, you twist and distort facts for maximum rhetorical effect. The suggestions to rollback the clocks were not made until the last few days before rollover, I'm not certain of the exact date, but it was posted here on TB2000. It was not a part of the NIST report and was simply a last minute suggestion. We also don't know how many companies with embedded systems took his advice but I would strongly suspect that his own company's clients who were not fully remediated did follow his recommendations as did other significant players.

As I said before, you don't live up to the name you've taken nor the concept you wish to pretend to hold to.

Now, as for the remainder of your slur and gross mischaracterizations allow me to remind you and any and everyone else that in my final projections I indicated a greater likelihood for perhaps 4 or 5 refineries to experience major shut downs. I didn't say it was a certainty.All I gave in my final projections were percentage esti- mates of probability. And I've state numerous times that I could be wrong. Furthermore, I never gave a doomer forecast...but you sir have attempted to label and libel myself as a "doomer" when I repeatedly stated that I was not a doomer nor in the doomer camp nor supported the TEOTWAWKI notion which is T-H-E definition of a doomer as in the term "doomer" means "inevitable destruction or ruin, extinction" ... to which I repeatedly stated that I did not believe to be the case. I have always felt that it would produce severe recession/depression. However, I respected those who did hold to that position and did not attempt to injure those who held such views, unlike yourself. Yet you continue to twist my words and my position like you have done to so many others as it suits you. I'd have reciprocated the same with the pollies had any of them not been so goofy and vicious towards the doomers in their posts.

Now, considering the fact that the embeddeds issue is just now coming into play and the trend is upwards in the quantity of refineries being affected, you only show your stupidity in prematurely closing the door on the issue. The issue is still far from settled. Your vehement venom is completely repugnant. Oh and by the way... if you really believe that Y2K is a non-event and passed, then why are you still here???? Obviously either you are lying or you have some mental disconnect. Your reason for remaining is either completely illogical or pathological.

Furthermore if you really knew anything about the embedded systems problems you would not be jumping up and down now, because even Koskinen himself indicated that there is a need to for his agency to remain on the job, and that the potential for serious problems are not over. Only a fool or someone who doesn't know or understand the facts would deny this. So which of the two are you?

GET A LIFE...and please feel free to leave and return to fantasy land.

-- RC (racambab@mailcity.com), January 12, 2000.

RC, I've been reading this forum for awhile and I want to thank you for your postings. Please, please, keep us updated

-- (dorado@doco.com), January 12, 2000.

Big Dog,

No slight intended on the golf industry, just those that play hookey to hit the links instead, I guess. Anyway, it sounded good at the time I wrote it. :-)

-- RC (racambab@mailcity.com), January 12, 2000.

Thanks RC for your update! Please ignore the ill-mannered among us.

-- jeanne (jeanne@hurry.now), January 12, 2000.

Mike,

You make an excellent point. I know, I grew up near a refinery and big tank farm myself. I saw fires and explosions that were awesome including many fatal accidents and incidents that damaged nearby homes and businesses.

You do have every right to be concerned and it seems to me that your preps were the most responsible and prudent course of action to take. Thanks for the reminder to me and an illustrative point for folks who don't live in such circumstances. It helps us keep the focus on the human element. Let's hope that all goes well without serious incident. None of us hope for any disasters to transpire from this but we can't just ignore the risks as some polly's would have you do.

-- RC (racambab@mailcity.com), January 12, 2000.

R.C., thanks for the update. It ain't over yet. What with your posts, Downstreamer's, Andy's and Gordon Gecko's, we are all getiing an oil education. thx

-- Nancy (wellsnl@hotmail.com), January 12, 2000.

Factfinder--don't you think the strength of the crude complex, in the midst of what may be a record warm winter, could have a Y2K component to it?-I wouldn't rule it out.R.C.--please keep us informed.

-- Richard Cunningham M.D. (clairejoie@aol.com), January 12, 2000.

Yeah, folks, just keep on wishing. Listen to an anonymous poster on an internet forum. Don't bother with the people who actually work with embedded systems. Yeah, that's the way to do it.

While you're kissing RC's butt, why not ask him about his credentials and his sources. Particularly the ones who told him about those pesky 9/9/98 problems.

-- Johnny Canuck (j_canuck@hotmail.com), January 13, 2000.

J canuck,

please for once post something as worthwhile as all that RC shares with us.

you have the mental capacity of an lobotomised ant.

thanks RC for your continuing take on this.

the markets don't lie - [apart from gold + silver!!!] - the fact that oil is actually strengthening now speaks volumes.

time will tell - especially with embeddeds.

the oil industry is extremely competitive - politics with OPEC etc. play a large part in pricing - it looks like the OPEC agreement (which is holding) will be extended. this still does not totally explain current market action.

J canuck, nows your chance.

please post something non-spiteful and worthwhile for a freakin' change.

asshole.

-- Andy (2000EOD@prodigy.net), January 13, 2000.

Canuck, RC did give us his credentials in December. You must have been kissing someone else's when he did, because you apparently missed it!

-- Elaine Seavey (Gods1sheep@aol.com), January 13, 2000.

Elaine:

Apparently, I did miss the post where RC discusses his credentials. Perhaps you could direct me to the URL?

I may not or may not have been kissing someone else's butt, but we Canadians are terribly reticent when it comes to discussing those kinds of things - so I'll have to remain quiet (g)

Andy:

Let us know when you hit puberty.

Hugs n kisses,

JC

-- Johnny Canuck (j_canuck@hotmail.com), January 13, 2000.

Nice response C you simpleton.

You know nothing about RC or his credentials yet you wade in with your usual ill-informed bigoted bullshit.

Still waiting for something, anything, of value from you.

-- Andy (2000EOD@prodigy.net), January 13, 2000.

Hey RC....Love Ya Man!!!

-- (karlacalif@aol.com), January 13, 2000.