Low demand for U.S. light sweet crude oil on the East and West coasts will limit these markets' ability to exploit cheap, growing supply from Canada, the Midwest and the Gulf Coast region

Tuesday, May 08, 2012

NOW AVAILABLE: In-depth crude oil market analysis along the East and West coasts, including existing and future production trends, transportation and refining infrastructure, demand changes and overseas oil imports through 2016.

BENTEK's Market Alert Crude Awakening: Shale Boom Hits Oil reveals over the next five years, the East and West coasts will not play a major role in U.S. refinery demand for domestically produced crude and that only a limited amount of supply from booming production areas across the U.S. and Canada will be transported to these regions. BENTEK reports crude oil production in the U.S. and Canada will grow at least 36% over the next five years, reaching 12,100 Mb/d by 2016. The PADDs 1 & 5 section of BENTEK's Market Alert projects crude oil production in the East Coast (PADD 1) and West Coast (PADD 5) will be stagnant during this time.

Unlike the U.S. Gulf Coast which may soon be exporting light sweet crude, the East and West coasts will continue to be dependent on crude from outside the U.S. to meet demand as there are no large pipelines connecting these regions to inland, oversupplied production areas including the Williston, Niobrara, Eagle Ford and Permian.

VIDEO: Watch the Platts Energy Week TVsegment featuring BENTEK Senior Director Adam Bedard: U.S. Oil Exports - Could It Happen Again?

Key takeaways from the PADDs 1 & 5 section of BENTEK's Crude Awakening Market Alert:

• The West Coast has been a shrinking market. However, PADD 5 production declines have outpaced falling demand, leaving the region more dependent on imports.

• The West Coast is an isolated coastal market with no crude oil pipelines linking the region to the rest of the U.S. However, Bakken crude is moving by rail to Washington, while BNSF is planning to move several unit trains per week to California.

• Growing production in PADDs 2, 3 and 4 could find a market in PADD 5, but only about 119 Mb/d of light crude was imported in 2011 and only about 59% was sweet - crude types most representative of unconventional domestic oil growth.

• Nearly 600 Mb/d of refinery capacity in PADD 1 has been idled or shut down in the past two years, and more closures loom.

• The East Coast is unique because it is overwhelmingly an import market. In 2011, nearly 93% of East Coast supply came from waterborne sources.

The PADDs 1 & 5 section of Crude Awakening: Shale Boom Hits Oil offers in-depth analysis of historical and projected crude oil production trends through 2016, including key production areas such as the Monterey Shale. This section reviews current and planned regional transportation and infrastructure, details supply from other regions of the U.S. and Canada and includes analysis of how these factors will impact prices and overseas oil imports.


Petroleum Project Tracker - Access the essential details of all upcoming U.S. and Canadian crude oil infrastructure projects, including pipelines, rails, storage, terminals and refineries.

Crude Oil Production Monitors - Provide comprehensive U.S. and Canadian coverage of the leading oil plays, including regional production forecasts, drilling activity, transportation and refining constraints and pricing analysis.

Geospatial layer bundle - Includes many of the pipelines and related infrastructure reviewed in Crude Awakening: Shale Boom Hits Oil.

Data package - Analyze the datasets behind the graphs and charts in Crude Awakening: Shale Boom Hits Oil.

To learn more, please contact your BENTEK sales representative or call BENTEK Sales at 1-888-251-1264.