Seaway helps bridge record oil gap, but analysts far apart

Wednesday, May 16, 2012

Just ahead of the Seaway oil pipeline restarting in reverse to clear a bottleneck of crude in the U.S. Midwest, Wall Street analysts have rarely been more divided over the outlook for one of the hottest oil market bets in years triggered by the glut.

For some like Goldman Sachs, the reversal of Seaway's flow set for Thursday is a seminal moment, marking the first major pipeline to ship oil directly from the Midwestern trading and storage hub at Cushing, Oklahoma, to Houston in the country's main refining center on the Gulf Coast.

"Seaway will start to drain Cushing, but there will still be a big bottleneck at Chicago," said Adam Bedard, managing director at Bentek Energy. He sees no relief there until mid-2014 or later.

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