US Crude Oil Supply Glut Eases
From Live Trading News
The expanded Seaway Pipeline,a 50/50 Joint Venture between the affiliates of Enterprise Products Partners L.P NYSE:EPD, and Enbridge Inc. NYSE:ENB along with other new Crude Oil shipping capacity, marks a new era for the US Crude Oil industry, soon flooding the Gulf Coast with light, sweet grades and signaling the region’s impending disconnect from the North Sea benchmark Brent Crude, according to Platts Oilgram News.
Earlier this month, the Seaway Crude Oil Pipeline Co. completed an expansion that boosted Crude Oil capacity to 400,000 BPD, nearly triple previous levels, between the Cushing, Okla., storage hub and the Texas Gulf Coast. Last May, the pipeline’s inland flow was reversed amid efforts to address a glut in the central US
The Seaway Pipeline expansion allows Gulf Coast refiners to participate in the raw material advantage that we have seen in the Midwest, I anticipate seeing Gulf Coast refiners running high operating rates, which translates the Crude Oil surplus into a petroleum products surplus, given the stagnant demand for refined products in the US said one analyst Wednesday.
Refining margins along the Gulf are expected to improve with the influx of “advantaged” Crudes, but eventually regional crude prices will come under pressure from the new supply, analysts said.
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