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View Diary: Ending Government Subsidies for Big Oil (76 comments)

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  •  Correct, the whole idea of the (1+ / 0-)
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    Dr Erich Bloodaxe RN

    Keystone pipeline is get the Texas benchmark up to the Brent price.
    Hoarding is in fashion in Cushing, Oklahoma. Mike Cantrell, president of Domestic Energy Producer’s Alliance, says the hub of oil storage in North America has an oil problem.

    D.E.P.A. represents thousands of small time oil producers, many right here in Oklahoma. They know the leader in storage of the gooey goodness is overflowing. It’s coming from Montana and Texas, and could soon flow from Canada.

    “To us in the oil and gas business, Cushing is the mecca,” said Cantrell.

    “Because that’s where everyone has to get their oil, and that’s become a problem.”

    In New York, oil traders at the Mercantile Exchange need a benchmark. With capacity for more than 50 million barrels of crude, Cushing fills that role. Full tanks mean future prices are higher than current ones.

    Emptying tanks? Refine and get it to gas stations before values fall even farther. Traditionally, Cushing’s price, known as the West Texas Intermediate benchmark, trades 3 or 4 dollars higher than the other standard, called Brent. Lately though, Cushing’s been coming in 20 dollars lower.

    “Producers are hurt by it and so if you’re selling your oil at the Cushing price instead of 10 or 15 or 20 dollars international price higher, producers suffer,” said head of the National Energy Policy Institute, Brad Carson.

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