For most of this year as the premium between WTI and Brent grew, analysts maintained that the large and growing inventory at Cushing, OK, was artificially depressing prices as much of that stock was not easily available. Enbridge's announcement yesterday of its purchase of ConocoPhillips' share of a pipeline from the Gulf to Cushing and its intention to reverse the flow to allow refiners greater access to the inventory immediately boosted prices at settlement 3.2%. Too emphasize the point, Brent lost 0.5%. The reversed pipeline will alleviate the need for barges and rail lines to bring crude, especially Canadian and North Dakota crude, to refineries. The market reacted positively despite the Obama regime's delay in making a decision on the Keystone XL pipeline project.
Inventories fell last week by a million barrels but that was dwarfed by the Seaway pipeline news.
Yesterday, WTI+$3.22, $102.59; Brent-51¢, $111.88; RBOB+4.16¢, $2.6273; HO-3.67¢, $3.1346.
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