Tuesday, February 05, 2013
North American crude oil producers seem poised to push down global prices for the next several years, but U.S. consumers aren’t expected to reap much of the benefit because of refiner profit-taking.
Anthony Scott, manager of oil analysis with Platts’ BENTEK Energy in Evergreen, Colo., said Tuesday global oil prices are expected to fall about $15 to $100 a barrel by 2018 because of new crude oil production from Texas’ Permian Basin and Eagle Ford formations; the Bakken formation in North Dakota and Montana; western Canada; and more oil from Libya, Iran and Iraq that has been off the market because of political considerations.
In the United States, prices will fall even more — to $74.33 a barrel for West Texas Intermediate — because surpluses near the fields are leading refiners to demand greater discounts, Scott said. In the lsst several months, for example, West Texas oil has been selling for $25 to $30 a barrel less than oil produced in East Texas.
The new North American crude oil supplies are expected to back out U.S. oil imports from the Middle East and other parts of the world. But Scott said until U.S. producers can export crude oil themselves (barred by law without presidential authorization), U.S. refiners will have the advantage. Refiners can can sell as much as they want abroad. (Refined product exports of diesel, gasoline and so forth were about 3 million barrels a day last year.)
Read the full article here.