May Bubble Map: MidContinent Crudes Getting to the Coast Lead to Tighter Differentials

January 24, 2014 By

May 14, 2013


We’ve given the Bubble Map a fresh look for spring. It’s a little less busy, but still contains the same great information. Notice the two price differentials for Bakken, one at the wellhead and one at Clearbrook, MN. We thought it would be instructive to show the cost of moving the crude by truck to the Enbridge pipeline at Clearbrook, MN. There are several more offloading points for Bakken, but Clearbrook is the most commonly quoted price. These differentials to WTI are about the same as last month, but look for the Clearbrook difference to tighten due to the May 10th restart of Northern Tier Energy’s St. Paul Park refinery sweet crude tower, with 8,000 barrels a day of expanded capacity.

The WCS differential has widened since we last checked in. However, it’s actually gotten better since the beginning of May when the differential was closer to $24 under WTI. That crash was due to a rash of Midwest refinery outages, including unplanned maintenance at Suncor’s refinery in Edmonton and a fire in the coker unit at Flint Hill’s Pine Bend, MN refinery. The planned turnaround at ExxonMobil’s Joliet refinery added to the drop in demand. The WCS differential has tightened significantly this week to $19 under WTI on speculation that U.S. refinery demand for Canadian imports will rise as these plants finish maintenance.

Meanwhile, differentials outside the Bubble have tightened and folks are keeping a close eye on the much narrower Brent-WTI spread. Crude oil is starting to move efficiently out of the Bubble mostly by rail, with some help from pipelines, and a little help from barges. Light sweet crude is moving to coastal refineries, backing out Brent and other imports. Goldman Sachs estimates the gap between Brent and WTI will tighten to $5 in the third quarter because the bottleneck between Cushing and the Gulf Coast is starting to disappear. We’ll keep track and see if that prediction comes true.

And now a request…We love putting together the Bubble Map for our readers, but we are having a heck of a time finding spot prices for the crudes listed. Ever since Bloomberg pulled their crude oil pricing, we’ve been Googling our fingers to the bone to find current spot price information that doesn’t cost an arm and a leg (I’m looking at you Platts). Does anyone out there have a good (free) source for spot prices? Please leave a comment and let us know.