The Emptying of Cushing

abarrelfullabarrelfull wrote on 02 Apr 2014 07:10
Tags: pipeline usa wti

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Since 2009, the massive changes being brought about by growing production of oil sands crude, tight oil and shale gas associated liquids, have meant that Cushing, the centre of the USA's crude inventories has been oversupplied with oil, and the pipelines emptying it have been insufficient.

The result of this has of course been that WTI, the US crude benchmark and Brent, the North Sea based global benchmark have been out of sync. The impact of this has been huge, Shale Oil Impact on both sides of the World talks about some winners, whilst Why Nigeria is Losing from US Tight Oil discusses one of the losers.

However, according to the EIA, crude oil stocks are down 32% over the past two months. So we finally have, albeit probably temporarily, a solution to our WTI "problem". It is not a surprise it is thanks to a couple of pipeline projects, first the Seaway Crude Oil Pipeline was reversed and expanded, secondly the first section of the Keystone XL Pipeline Project was recently completed.

Just as the impact of too much US crude was felt world wide, The Impact of Keystone XL on Global Oil Markets is going to be big as well.

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