The spiderweb of cracks in the global oil market are spreading across the Rocky Mountains and US Great Plains as demand for a shrinking pool of accessible crude escalates. Oil grades from Texas and North Dakota to Alberta are surging as refiners compete with rivals in Asia and Europe for barrels after weeks of strangled shipments via the Strait of Hormuz.
Bakken oil traded at the Clearbrook, Minnesota, hub shot up to an $18 premium to the monthly average of West Texas Intermediate on Monday, compared with a $1.20 discount the day before the Iran war erupted on Feb. 28, according to Modern Commodities prices.
North American Crude Grades Surge
Photo Credit: (Photo: Bloomberg)
North American Crude Grades Surge | Iran War ripples through the North Dakota, Texas and Alberta oil patches
“It's all about US exports,” said Dennis Kissler, head of energy trading at BOK Financial Securities Inc. "We're going to be exporting a ton of crude, that's what's keeping WTI elevated.”
In Canada, synthetic crude produced by processing oil-sands bitumen, traded at a $19.90 premium to WTI, up from about $1 a month ago. Mars crude pumped from the US Gulf of Mexico climbed to around an $18 premium to WTI last week, before easing to around $17. Southern Green Canyon has traded above a $7 premium for five straight sessions.
US and Canadian oil is increasingly being drawn to coastal markets for export, tightening local spot supplies, according to traders. One crude grade that wasn't surging Monday was the local Canadian benchmark Western Canadian Select. The discount to a monthly average of WTI widened to $16.25 from $14.65, according to Modern Commodities, amid rising volumes of Venezuelan crude.
ALSO READ: Brent Crude Steady Above $110 As Trump's Iran Deadline Fuels Market Anxiety
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.