But now we have the explanation, over at Rigzone.com.
Brent's premium to the U.S. benchmark price on the New York Mercantile Exchange blew out by $1 a barrel, to $19.06 a barrel, the most since Jan. 3, after operators of the Seaway Pipeline said the key conduit may not be free from potential operational restraints until work on a new section of pipeline is completed near the start of the fourth quarter.
Seaway, the pipeline outlet for growing crude oil supplies from the Midwest to the key Gulf Coast refining hub, last month more than doubled operational capacity to 400,000 barrels a day last month. Anticipation that the higher flows to the Gulf from Cushing, Okla.--the delivery point of the Nymex contract--had driven U.S. crude prices higher, on the notion they would gain market share at the expense of costlier imports, priced against the value of internationally traded Brent.
While the spread did narrow briefly in January to its weakest level since July, at under $16 a barrel, news last week that operating problems cut the flow on the line to just 175,000 barrels a day, pushed it back out, with Brent galloping higher, at the expense of the U.S. benchmark.
1. Cheap gas in OK and ND, or high refining margins.
ReplyDelete2. XOM call: They have transport from oil sands arranged. Huge oil flow starts this year. Refused to comment on the "tell us if you ordered a massive amount of rail cars." 2013 Rig count not yet set.
3. Another topic, probably. Listening to Wynn call. Well worth a listen for Three Little Pigs story and more. Listen, don't read. The voice is magic. Interesting talk about city hotel and casino markets.
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