Tags: Gulf coast | oil | oversupply | crude

WSJ: Gulf Coast Faces Oil Oversupply

By    |   Monday, 09 December 2013 08:14 AM

Oil is gushing on the Gulf Coast, which has the largest assemblage of petroleum refineries in the world.

Crude is coming there from the bounteous fields of West Texas and Louisiana and new pipeline routes established elsewhere.

The Gulf Coast is seeing so much high-quality U.S. oil that the price of crude there has plunged in recent weeks, falling beneath prices overseas, The Wall Street Journal reports.

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

"Louisiana Light Sweet," a crude-oil variety common on the Gulf Coast, usually trades at a $1 to $2 premium over European (Brent) crude. But on Wednesday, Brent cost $9.46 more than the U.S. variety, according to The Journal.

Some experts warn of an approaching glut. "We are moving toward a significant amount of domestic oversupply of light crude," Ed Morse, head of commodities research at Citigroup, told The Journal.

The implications of the trend include falling gasoline prices for Americans, rising profits for refineries and increased pressure on Congress to permit oil exports, the paper reports.

But oversupply could damage the same companies that helped cause it: independent drillers, who have sparked a huge increase in output, according to The Journal.

Meanwhile, the benchmark U.S. crude, West Texas Intermediate, hit a five-week high Friday amid enthusiasm over U.S. November jobs data. January WTI futures reached $98.07 Friday on the Nymex.

Non-farm payrolls gained 203,000 last month. "These were spectacular jobs numbers and will ultimately be supportive for energy prices,” John Kilduff, a partner at Again Capital, told Bloomberg.

“We’ve already seen demand pick up, and this is a signal that it will be stronger going ahead.”

Editor’s Note: Add Up to $152,046 to Your Social Security Benefits Using Weird Trick

Related Stories:

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
Markets
Oil is gushing on the Gulf Coast, which has the largest assemblage of petroleum refineries in the world.
Gulf coast,oil,oversupply,crude
311
2013-14-09
Monday, 09 December 2013 08:14 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved