TransCanada's Keystone XL pipeline isn't the only big oil pipeline in the works. Houston-based Enterprise Products Partners and Canadian company Enbridge said Thursday they plan to build a pipeline to move oil from the oversupplied hub at Cushing, Okla., to Gulf Coast refineries, giving the disputed Keystone XL pipeline a bit of competition.
This has led to an oversupply of oil at the key pipeline hub in Cushing, which is where the New York Mercantile Exchange prices oil for its most commonly quoted benchmark. This oversupply at Cushing has led to a wide gap between Nymex oil prices and global benchmarks such as North Sea Brent crude.
Rusty Braziel, vice president of marketing for Bentek Energy, said Wrangler could compete with the Cushing-to-Gulf Coast third leg of the Keystone project. "But based on Bentek's outlook for light crude oil production from the major shale and tight crude plays like Bakken, Eagle Ford, Anadarko, Permian and Niobrara - plus imports of heavy crude from Canada - there should be more than enough supply for both of these projects," Braziel said. "Both Wrangler and Keystone are great news for the refining industry along the Gulf coast."
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