Re: mkt thoughs

Is this why BP thought to squeeze the market?

Jeff

Patrick Danaher@ENRON
10/23/2000 05:17 PM
To: Alex Mcleish/EU/Enron@Enron
cc: Chris Mahoney/LON/ECT@ECT, Ted Robinson/HOU/ECT@ECT, Andrea
Hauser/NA/Enron@Enron, Luis Mena/NA/Enron@Enron, Larry
Gagliardi/Corp/Enron@Enron, Mario de la Ossa/NA/Enron@ENRON, Jim
Goughary/HOU/ECT@ECT, David J Botchlett/HOU/ECT@ECT, Bill F
Briggs/HOU/ECT@ECT, Don Schroeder/HOU/ECT@ECT, Phil Clifford/HOU/ECT@ECT,
John Wilson/NA/Enron@ENRON, Pavel Zadorozhny/HOU/ECT@ECT, Richard
Yeboah/NA/Enron@Enron, Robert Fuller/HOU/ECT@ECT, Spencer Vosko/HOU/ECT@ECT,
John L Nowlan/HOU/ECT@ECT, Alberto Valcarcel/HOU/ECT@ECT, Suzanne B
Clapp/HOU/ECT@ECT, Clayton Seigle/HOU/ECT@ECT, Niamh Clarke/LON/ECT@ECT, Ross
Koller/LON/ECT@ECT, John Buckner Thomas/LON/ECT@ECT, Chris Glaas/LON/ECT@ECT,
Anastasia Karabatsos/LON/ECT@ECT, Tracy Wallace/LON/ECT@ECT, Richard
Slovenski/SIN/ECT@ECT, Patrick Markey/HOU/ECT@ECT, John Chismar/SIN/ECT@ECT,
Hans Wong/SIN/ECT@ECT, Wang Moi Eng/SIN/ECT@ECT, Caroline
Abramo/Corp/Enron@Enron, Mark Jones/LON/ECT@ECT, Tony O'Brien/LON/ECT@ECT,
Henkka Talvitie/LON/ECT@ECT, Jeffrey A Shankman/HOU/ECT@ECT
Subject: Re: mkt thoughs

The most significant aspect of the syncrude production problem is the unique
blending qualities of the sweet crude produced by the plant. The synthetic
crude produced by this plant has no bottoms. All other crude oils have at
least some bottoms, therefore the demand on the replacement blending barrel
will be higher than the volume of barrels lost. With the plant production
down approximately 3.5 to 4.0 millions barrels, the impact ultimately will be
an increase of wti demand during the Oct. 15-nov 15 approaching 130,000 b/d.
Given the tightness of light sweet crude oil in padd 2, I believe this is
significant. I think it was the main reason for x/z strengthening and the
recent strength in z/f may also be attributed to this recent supply
disruption. Until there are additional sweet barrels arbed into padd 2 from
padd 3, I think we will see strength in the prompt spreads.