California Lawmakers Provide Good News For The Bakken

Earlier this morning, RBN Energy provided a bit of insight regarding the narrowing of the Brent/WTI spread. 

The Brent/WTI spread of $15 covered the transportation costs of railing Bakken crude to the east coast.

As the Brent/WTI spread narrows, it becomes less attractive for the refineries on the east coast to buy Bakken oil. Brent will be cheaper.

Bad news for the Bakken.

Rail will allow the flexibility for Bakken oil to be railed to California.

Will California need it?

Yes.

California is getting closer and closer to putting a moratorium on fracking. After sixty years of safely fracking in California, the lawmakers there feel the technology needs to be studied. And, apparently fracking in California can only be studied once fracking is halted in California.

I can't make this stuff up.

By the way, RBN Energy does not think the Brent/WTI spread will continue to narrow all that much, and, in fact, will increase once again. Regardless, changes in oil shipments won't happen overnight. There are a lot of contracts in place.