January 2014, Vol. 241 No. 1

In The News

Oversupply Forces Down Oil Prices On Gulf Coast

So much high-quality U.S. oil is flowing into the U.S. Gulf Coast that the price of crude there has dropped sharply and is no longer in sync with global prices.

Some experts believe a U.S. glut is coming. “We’re moving toward a significant amount of domestic oversupply of light crude,” said Ed Morse, head of commodities research at Citigroup. The abundance reflects surging output from oil fields in West Texas and North Dakota, as well as new pipeline routes to move crude to the refining and petrochemical complexes in Texas and Louisiana. The glut on the Gulf Coast is likely to grow, according to the Wall Street Journal, as the southern leg of TransCanada’s Keystone pipeline begins transporting 700,000 bpd of crude from Cushing, OK, to Port Arthur, TX.