Later: another look at WTI/LSS/Brent pricing. Link provided by a reader. This may be the best line:
“We have all these sweet barrels in the Midwest that need to find a home, and they’re getting to the market by planes, trains and automobiles, you name it,” said Stephen Schork, president of the Schork Group Inc. in Villanova, Pennsylvania. “You compound that with increased production in west Texas and the Eagle Ford, and you have a template for LLS to move to a discount.”Investors: time to get back into refiners? (See disclaimer for this blog.)
Barclays is not alone. There is a great article at the Oil Drum.
It is in two parts, Part I and Part II.
Part I is very, very long and provides an excellent foundation for the author's conclusion. The entire article, Part I, is free.
Part II requires a paid subscription but the executive summary is provided. My hunch is that the executive summary is more than enough for most blog readers.
I can't even begin to summarize what is said in the very long Part I, but two things jumped out at me:
- the discussion of qualitative easing as it applies to the price oil
- OPEC and spare capacity -- a topic I have talked about at length at this blog
The linked Oil Drum article says the new floor for oil (average Brent/WTI) is $80; and the price is "marching toward $200."
So, we'll see. We only have to wait a year. Caveat: I've noticed that folks have been projecting $200-oil for several years.