interesting report, page-3

Pricing is a complex subject and not nearly as "simplified" with the spread reduction of WTI/Brent by mere reversal of Seeway Pipeline...

Consider that, roughly speaking

U.S. currently produces 5.7 Mmbopd crude, imports 9 Mmbopd crude, and exports 50,000 bopd. Technically not permitted to export crude - just "refined products".

Where approx 1% of crude that is exported go? To Canada.

Imports from Canada are 2.3 Mmbopd. Oil that is exported to Canada is most likely produced in fields that have easier access to Canadian refineries than to U.S. refineries.

Its about refininig and the "crack spread" and refineries are turning to a heavier sour grade of crude.

Which in turn creates problems as most of the new shale oil supply from US and Canadian fields is Light Sweet Crude.

It gets even more complicated because some oil refiners like Valero -- who don't actually produce oil at all, just import oil from countries like Mexico and Brazil, refine it, and ship gasoline back to them.

Between just Mexico and Brazil - importing 1.5Mmbopd, and exporting 1 Mmbpd of finished products. (Some of the oil does stay in the U.S. as finished products)


Net Net - I agree with the statement that as WTI goes up returns improve. True also for NGLs piece. There is alot of discussions on the various pipelines and flows so that producers can improve margins.

The real question is how will pricing hold up overall as their is rapidly growing supply of Light sweet oil...