• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 47 mins Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 7 hours Tesla Launches Faster Third Generation Supercharger
  • 51 mins EU has already lost the Trump vs. EU Trade War
  • 8 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 48 mins ''Err ... but Trump ...?'' #Humph
  • 10 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 2 hours China's Renewables Boom Hits the Wall
  • 22 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 17 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 23 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 21 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 22 hours Trump Interview On Farage's Radio Show #classy
Alt Text

How To Play A Recovery In Oil Prices?

A realistic correction in the…

Alt Text

The Worst Oil Trades Ever Made

Wall Street is full of…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

Here's Another Mysterious Oil Shipment

Something odd is afoot in the North American crude markets.

Previously I mentioned some strange shipments of crude taking place lately here. Like eastern Canadian White Rose oil going all the way to India for the first time ever.

Or Colombian oil being sold to Italy. Another first for the market. (Previously, such crude often went to the U.S.)

Now, a third mysterious shipment has emerged in as many weeks. This one from rural Alberta to Singapore.

Platts reports that Shell shipped Cold Lake heavy crude to the port of Vancouver on the Canadian west coast. And then loaded an Aframax tanker for delivery to Singaporean buyers.

Traders noted this is another first for the global crude markets. Singapore has never before purchased the Cold Lake blend.

So why is crude sailing to so many odd places recently?

The answer appears to be related to one factor: surging U.S. supply.

Oil output from American shale plays like the Eagle Ford and tight oil basins like the Bakken is exploding. With this new supply displacing several crudes that used to be shipped primarily to U.S. buyers.

Including a number of Canadian blends. The U.S. used to the be the go-to market for this oil. But today it simply can't compete with domestic supply.

We can see evidence of this phenomenon in today's oil prices. Ample North American oil supply is causing prices on the continent to drop relative to global crudes. That's the reason WTI crude is selling for $98 per barrel, while European Brent goes for more than $110.

Canadian prices are fairing even worse. Benchmark crude Western Canada Select is going for a meagre $71 per barrel today. And heavy crudes like Cold Lake sell at a discount to that price.

But unlike American producers, Canadian oil firms are allowed to export crude. And they are do so--seeking better pricing in international markets.

The question is: what will happen to American oil? Prices for U.S. Gulf Coast blends like Louisiana Light Sweet are dropping versus Brent. Something that never happened during previous falls in the WTI price.

Signalling that crude may be piling up in all corners of the U.S. now. Potentially meaning that un-exportable U.S. oil is going to sell at a discount to international prices for the foreseeable future.

Something to keep in mind for our energy investments the next while.

Here's to the Cold Lake conundrum,

By. Dave Forest




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play