Wow, I Love These Stories -- Bakken, Canada, Europe, Saudi

Another great story sent to me by a reader, thank you: link here to Reuters:

The United States now gets so much crude from its own shale deposits that Canadian exporters are selling as far afield as Europe, showing how deeply the U.S. energy revolution is transforming global oil flows.

As recently as 2011, close to 100 percent of Canada's crude exports went to its neighbour the United States, according to the U.S. government's Energy Information Administration (EIA).

But trade and shipping sources said more than 2 million barrels of light crude from Canadian offshore oilfields have gone to Europe in the last month, in a taste of what is to come.

The change is due to technological advances the U.S. expects will bring a 900,000 barrels per day (bpd) record jump in its oil output to 7.3 million bpd in 2013, the EIA said ealier this month, from places like the Bakken shale deposit in North Dakota that now feeds U.S. East Coast refineries served by Canada.

Wow, there are a lot of story lines there. Of course, the one that caught my eye was the reference to the Bakken again, as the "gold standard" for results and research.

But this is the bigger story. It is easy to fall into US-centric thinking. I don't want to get all touchy-feely with globalization and 'flat earth' but I often fall into the "US-us -- Canada-them" trap. The linked story reminds us that it is not US vs Canada but North America (and with SRE/natural gas/Mexico as but just one example, one can include the entire continent) as the center of energy excitement. This is not new; just a reminder. We've talked before how the center of energy (or however it was phrased) has moved from Saudi Arabia/Mideast to the west.

This is key in the story above: the US does not allow export of oil except in certain situations (one, of course, it allowing oil export to Canadian refineries). But Canada does export oil to countries other than the US. Like Europe, Brent is about $16 more than WTI.

There appear to be two developing (continuing?) trends:

• Brent is trending higher
• Brent/WTI spread is narrowing

And for Bakken investors, Bakken/WTI nears parity at Clearbrook, MN.

Again, another argument is a strawman: the argument over whether the US should allow its oil to be exported. There are a lot of moving parts to make it a binary decision. 

I think "we've" been focused too much on a) the Keystone XL; b) Canada's attempt to move more oil west to Asia; and, have missed the bigger picture, c) Canada exporting oil to Europe.

Saudi has cut production/exports in the last two months (earlier it was reported just one month, but a follow-on story suggested the past two months). Who would have thought the Bakken would have made this possible? As a reminder, the Bakken is said to be producing about 12% of America's domestic production, and its production potential is choked back for a number of reasons.

Wow, what a great story. A "huge thank you" to the reader for sending me this.

The linked Reuters article has a lot of archival information regarding potential profits and the global movement of oil.