The reversal of the Seaway was completed, but the expansion from 150,000 bbls/d to 400,000 bbls/d was delayed until 4Q13 (although there are hints that the expansion may be back on track sooner).
It now appears that even with the Seaway reversal, the glut will persist. Remember: there are at least three major fields now in production contributing to the glut: the Permian (west Texas), the Eagle Ford (south/southeast Texas), and the Bakken. Not far behind (?): the Niobrara and the Mississippi Lime.
The operators of the nation's largest pipeline, the Capline, running from Louisiana to Illinois, have announced they will reverse the flow of this pipeline. They had originally planned not to reverse the flow when it was announced the flow of the Seaway pipeline would be reversed.
Today, at Bloomberg:
- WTI: $96
- Brent: $115
The Bakken/WTI spread at Clearbrook, MN, has narrowed from $3.25 to $3.15. [WTI at $96, means Bakken at Clearbrook is about $93.]
I tried connecting the decision to reverse the flow of the Capline (this is a reversal in itself) with the reality that the Keystone XL is not likely to be approved, but I can't connect the two. But as long as I've mentioned it, I might as well complete the thought: killing the Keystone XL will be seen as a plus for the domestic US oil industry. There is so much oil coming out of the mid-continent, any more oil from Canada just couldn't be handled right now. At least that's my two cents worth. So, why are we still importing oil if there is so much oil being produced by the US? Part of the reason has to do with the type of oil US refineries are configured to use. Again, I'm way beyond my understanding of the oil industry, but that's my two cents worth.
OK help a relatively new (greenhorn), Bret / WTI / Clearbrook. Please provide a minimum and maximum price per bbl to expect out of the ND Bakken. Time to put this into laymans terms. No need to make life more complicated than it allready is.
ReplyDeleteDuring the current period (late 2012 to early 2013), for Bakken oil:
ReplyDeleteMinimum: $50
Maximmum: $110
We need both light sweet and sour crude due to refinery setups and product line from each.
ReplyDeleteCanada's bitumen is very heavy and has to be diluted to flow in a pipeline but its advantage is it is lower in sulfur than other sour crude from places like Venezuela. Venezuela crude has a very high sulfur content.
Aside form those difference we should be asking ourselves who do we want to spend our petro dollars on for the import of this crude. We are allied with Canada and they are our very close next door neighbor that shares our democratic values. Venezuela is not allied with us and they support terrorist states like Iran. We import around 800,000 barrels from Venezuela a day. It would make far greater sense if we obtained our sour crude from Canada.
The Keystone XL is a test of who this administration is. They are acquiring a long record of abusing our friends and fawning all over our foes.
Most domestic oil production is of the light sweet verity so I do not believe that oil producers are working against the development of the Keystone XL pipeline. That may be a story line for Warren Buffett, BNSF and it would work to some extent for Enbridge.
OT: Java software by Oracle has been under attack by hackers with their viruses, so that may be some of your concerns about viruses.
Thank you. Especially regarding the clarification on "heavy oil." I think I knew that at one time, but I have to be hit over a head with a 2x4 to remember some of this stuff.
DeleteI think I've got it this time, thank you.
That's interesting about Java; I wouldn't be surprised if some of my links are to sites that use Java. Thank you.
Again, thank you for reminding me about importance of heavy oil. It is interesting that "we" prefer heavy oil from OPEC rather than heavy oil from Canada. Smile.
You have a lot on the plate with this blog and are to be commended for all of that hard work. I didn't mean to use a 2x4. You are not the kind of a person that needs that to get your attention.
ReplyDeleteCheers!
Not at all. I don't mind getting hit -- just an analogy. I'm just trying to get a better understanding of the Bakken. Seriously, it is amazing how many times I sometimes have to be told something before I get it, so it doesn't bother me at all -- as long as it helps me and others.
DeleteBut again, some of the comments folks send me, are "aha moments" for me; I finally get it. Thank you.