As demand for dwindling accessible crude oil intensifies, fractures in the global crude market are spreading in a web-like pattern across the Rocky Mountains and the U.S. Great Plains. Crude grades from Texas and North Dakota to Alberta are experiencing surging prices. This is driven by refiners competing with rivals in Asia and Europe for supply, following weeks of transport disruptions through the Strait of Hormuz. According to price data from Modern Commodities, Bakken crude traded at the Clearbrook, Minnesota hub commanded an $18 per barrel premium to the monthly average of West Texas Intermediate (WTI) on Monday. Just one day before the Middle East conflict escalated on February 28th, the same grade was at a $1.20 per barrel discount. Dennis Kissler, Head of Energy Trading at BOK Financial Securities Inc., stated, "This is all about U.S. exports. We are exporting substantial volumes of crude, and that is why WTI prices are remaining elevated." In Canada, synthetic crude produced from oil sands bitumen traded at a $19.90 premium to WTI, compared to a premium of around $1 a month earlier. Mars crude from the U.S. Gulf of Mexico surged to a premium of approximately $18 over WTI last week before settling back to around $17. Southern Green Canyon crude has maintained a premium of over $7 for five consecutive trading sessions. Traders indicated that crude from the U.S. and Canada is increasingly being drawn to coastal markets for export, thereby tightening local spot supplies. The one crude grade that did not surge on Monday was the Canadian local benchmark, Western Canadian Select. Data from Modern Commodities showed the discount for this grade versus the monthly WTI average widened from $14.65 to $16.25, attributed to increased availability of Venezuelan crude.
Comments