High Crude Oil Prices Prompt SPR Murmurs
August 22, 2012
Crude oil prices are up this week with WTI closing at $97 on August 22nd. The spreads between WTI and most coastal crudes remain relatively unchanged. The price of Bakken remains relatively in line with WTI at $1 under. The WCS discount continues to tighten to $11 under from $14 on August 14th.
With global crude oil prices climbing and pump prices hovering around $4, the White House recently announced that it is considering tapping into the Strategic Petroleum Reserve in the event of a price spike or supply interruption. Tapping into the SPR is a temporary and ineffective solution. Investing in infrastructure that brings discounted crude oil from the Mid Continent to refineries on the coasts is a better long-term strategy. In next month’s newsletter we’ll be taking a look at what effects past releases of the SPR has had on prices. Please feel free to leave a comment and let us know what you think.
Categories: Wisdom from the Downstream Wizard