North American Oil Prices Soar as Global Crude Shortage Bites
The global oil market is experiencing a severe shortage of accessible crude, causing demand to skyrocket for North American oil. The Rocky Mountains and U.S. Great Plains are seeing a significant increase in oil prices as refiners compete with rivals in Asia and Europe for barrels.
According to recent data, Bakken oil traded at the Clearbrook, Minnesota hub shot up to an $18 premium to the monthly average of West Texas Intermediate (WTI) on Monday. This is a stark contrast to just last week when it was trading at a $1.20 discount to WTI.
Canadian oil is also seeing a surge in demand, with synthetic crude produced by processing oil-sands bitumen trading at a $19.90 premium to WTI. Mars crude from the U.S. Gulf of Mexico has climbed to around an $18 premium to WTI before easing slightly.
Dennis Kissler, head of energy trading at BOK Financial Securities Inc., attributes the surge in demand for U.S. exports. He notes that the country will be exporting a large quantity of crude, which is keeping WTI elevated.