U.S. East Coast refiners look to Texas crude for discounted oil

May 10, 2018

U.S. East Coast refiners are shipping more shale oil from the Gulf Coast thanks to heavy discounts for West Texas crude and are also looking to bring more via rail, but supply bottlenecks are making it difficult to secure more barrels.

Producers are pumping record volumes of oil from the Permian basin, the biggest oilfield in the United States and the source of most of the country's shale oil, and that is straining the region's energy infrastructure.

Pipelines from west Texas to the Gulf Coast are full, and developers will not finish new lines until next year. Rail terminals are nearly all dedicated to bringing supplies to shale producers such as the huge volume of sand used to extract oil from the ground. In the last seven years, crude has gone to the East Coast by rail in just one month - June of last year.

The transport bottlenecks could limit the pace of growth of shale production, and as pipelines fill, the price of oil in the region has fallen...

Read more on Reuters...

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