• 2 days Court rules DOE to implement Obama efficiency rules
  • 6 hours DOA to invest $6.5M in coal industry
  • 6 hours US to hold largest oil and gas lease sale in its history
  • 1 day Tillerson Seeks A Deal With Erdogan On Syria
  • 1 day White House considering steel and aluminum tariffs
  • 2 days Iraq Seeks $100 Bln to Rebuild Economy
  • 2 days Allegedly the Search For Aliens is Struggling Thanks to Cryptocurrency Mania
  • 4 hours New Rules to Phase Out Coal and Reduce Natural Gas in Canada
  • 2 days Amazon reaches $1.2 million settlement with EPA over illegal pesticide sales
  • 6 hours White House Not Even Close to Regulating Bitcoin Yet
  • 1 day U.S. Bancorp hit with $613M in penalties
  • 5 hours Experts said US losing ground to China on AI
  • 2 days Australia's solar power boom to double in a year
  • 2 days US intelligence warn against Chinese phones
  • 2 days Electric Buses to Reach Half of World Fleet by 2025
  • 2 days How Good Is Putin's Word?
Alt Text

Russia Is Taking Over Syria’s Oil And Gas

Syrian oil production fell quickly…

Alt Text

Will Higher Oil Prices Tempt OPEC And Russia To Cheat?

OPEC and Russia have succeeded…

Alt Text

The Shale Driller's Dilemma

Shale drillers face a major…

Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

More Info

U.S. Gas Prices May Fluctuate if Canadian Bottleneck Eases

U.S. Gas Prices May Fluctuate if Canadian Bottleneck Eases

Canadian oil producers may get a better price for crude in the overseas markets because of the glut of oil in the North American market. That in turn could reshape the U.S. price market for retail gasoline, AAA said Monday.

AAA spokesman Michael Green told Oilprice there's a bottleneck building up for Canadian crude because of the general increase in North American oil production.

"Canadian producers may find higher prices selling crude oil to places like China or Europe than to refineries in the central United States," he said.

Related Article: Canada Setting Stage for Oil Exports Beyond U.S.

The National Energy Board, Canada's independent regulator, announced in early March it approved a request from Enbridge to reverse the flow of oil through its Line 9 pipeline system. The project involves shifting the pipeline's direction to the east coast and increasing its volume from 240,000 barrels per day to 300,000 bpd.

Last week, Valero Energy Corp. said it would source crude oil from Line 9 to feed its refineries in Quebec, a move that would eventually end the provincial dependence on oil from Algeria and other regional suppliers.

Other projects, from TransCanada's Energy East pipeline to the Northern Gateway for Canada's West Coast could help fuel Canadian Prime Minister Stephen Harper's efforts to bring oil to foreign markets.

Currently, nearly all of Canada's oil heads to the United States.

AAA's Green said once all the Canadian pipeline additions enter into service, it could reshape the gasoline map for U.S. retail consumers. With lower imports of Canadian oil into the U.S. refinery market, the price of West Texas Intermediate, the U.S. benchmark, could increase, which would mean slightly higher gasoline prices for central U.S. consumers, where it's currently the cheapest.

"On the other hand, increased Canadian exports could help to lower the price of Brent and other international grades of crude oil," he said. "This could help lower costs for U.S. refineries along the East and West Coasts, which often rely on imported oil from overseas."

Related Article: Supermajors Balk at Canadian LNG Profit Tax

The U.S. East Coast and West Coast markets typically have gasoline prices higher than the national average. California had the highest state average for the Lower 48 with $3.97 for a gallon of regular unleaded. New York led the East Coast market with $3.76 per gallon. The national average for Monday, according to AAA, was $3.53, relatively unchanged from the previous week.

In general, Green said the increase in North American crude oil production has been a net benefit for consumers. The increase in gasoline supply sourced from domestic crude has shielded a North American economy that would otherwise be exposed to volatility in overseas markets. Two years ago, he said, the national spring average peaked at $3.94, but with the production booming, it shouldn't pass the $3.65 mark this season.

By Daniel J. Graeber of Oilprice.com




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News