Pricing Pressure Pushing Bakken Prices Lower In Texas -- RBN Energy;

Active rigs:

	4/1/2014	04/01/2013	04/01/2012	04/01/2011	04/01/2010
Active Rigs	195	186	207	170	103

RBN Energy:

In the eight weeks since January 24, 2014 crude oil stocks in the Gulf Coast region grew by 34 MMBbl to reach record levels. Much of the crude pouring into the Gulf Coast is coming by pipeline from Cushing where stocks have been draining over the same period.

In addition the Gulf Coast is receiving increased domestic and Canadian supplies from the Midwest via waterway and rail as well as by pipeline from the Permian Basin and by pipeline and barge from the Eagle Ford. Existing Gulf Coast infrastructure is being strained by the challenge to stage crude supplies to area refineries. Today we describe increasing flows of crude into the Gulf Coast region.

And as Cushing inventory has fallen, Gulf Coast stocks have increased.

CBR:

Increased movements of crude oil by rail are contributing to the Gulf Coast stockpile. The Association of American Railroads recently reported that more than 780 Mb/d of crude moved by rail in 2013 -  a 71 percent jump from 457 Mb/d in 2012.

All this incoming crude means the infrastructure required to stage supplies for timely delivery to Gulf Coast refineries is under increasing stress. The situation is made worse by the long-running ban on crude and lease condensate exports. That ban limits crude exports except for limited quantities to Canada and means that crude at the Gulf Coast refiners can’t process ends up in storage or needing to be blended to meet refinery requirements. The growing imbalance between US domestic light crude from shale and Gulf Coast refining capacity designed to process heavy crudes exacerbates this challenge.

In the meantime the surge of crude supplies at the Gulf Coast is putting downward pressure on  crude prices. The premium of Gulf Coast benchmark Light Louisiana Sweet (LLS) to WTI at Cushing narrowed  to $2.25/Bbl yesterday (March 31, 2014) – the narrowest it has been since April 2010. 

And since as we said at the start of today’s blog, Gulf Coast storage inventories are already at record levels, it seems likely that there could be serious challenges ahead if the region starts to run out of crude oil storage space. That is the issue we turn to next in this series to understand how much additional crude storage is available and whether it is enough to handle all of the barrels being shoved into the Gulf Coast market.

 The Wall Street Journal

Yellen assures markets on interest rates. The market acted positively positive yesterday following her remarks and futures indicate more of the same today.

This is hardly news: ObamaCare websites went down (crashed) during the weekend surge. By the way, my hunch is that "open season" will move from the last three months in a calendar year to the first three months in a calendar year. ObamaCare will reset the health insurance calendar. This way, insurance companies won't release the new premiums (expected to surge) in October, just before the election.

This seems unexpected: for the first time since the recession, US farmers are planning to pull back on corn production.

Global warming has disrupted school calendars across the nation. All the snow and all the cold this past winter resulted in number "snow days" which now have to be made up.

Detroit bankruptcy: bondholders and pensioners will get even less under new plan.

Remember the outrage over the cost of that new hepatitis C drug? The pill "that costs $1,000 a day is on track to notch among the biggest sales ever for the first year of a newly approved drug, showing how hard it is for insurers to curb usage."

Size and cost of GM's recalls mount.

Diet soda sales waste away. It's hard to say what's replacing these diet soda sales but "caffeinated energy drinks and ready-to-drink coffee rose 5.5% and 6.2% last year, respectively. Sales of sports drinks edged up."

Caterpillar avoided $2.4 billion in federal taxes under a corporate restructuring that shifted most porfits from an overseas division to a Swiss subsidiary. The headline fails to say the total accrued since 1999. Congress could have closed this loophole but chose not to do so. From what I'm reading, it sounds like CAT took a page from Warren Buffett's playbook on taxes.

Mark "Facebook" Zuckerberg's 2013 salary tumbled 67%: he declined to participate in the bonus plan and took a base salary of $1. By so doing, he deprived the federal government of some serious tax revenue. LOL.

Having battered one legal opponent in its fight to undermine a $9.5 billion envionmental verdict in Ecuador, Chevron is now going after another: law firm Patton Boggs.

Exxon: climate regulations don't threaten the value of its reserves. 

NPR Morning News

Medicare payment cuts to physicians will be temporarily shelved for the 17th time since 2009. President Obama signs the bill today.

Arizona court upholds law on strict laws regarding oral abortifacients. 

Oil in the Houston Ship Channel has now reached some very sensitive natural preserves in the gulf.

The Los Angeles Times

School superintendent's $675,000 pay in a southland district called excessive. I would call it obscene. But then this is California.

Apparently global warming is helping one mammal: California is reporting record whale migrations.

California extends deadline for ObamaCare due to delays. 

Progress is moving toward yet another federal holiday, this one honoring Cesar Chavev.

Linda Ronstadt to be inducted into the Rock Hall of Fame.