WTI oil price increase If the world price (Brent) stays the same, I think that the price of WTI is going to increase by about $20 bbl over the next few years. Historically WTI has sold for the same price as Brent because it is the same quality; however, increased production from the Bakken and the oil sands has overwhelmed the storage and pipeline capacity in and to Cushing Oklahoma where WTI is priced. This has driven down the price of WTI.
If they can get the crude at Cushing OK to the refineries on the Gulf coast of Texas then WTI will get world price. In 2013 pipelines carrying 360,000 bopd are scheduled to be completed. In 2014 there will be another 1,3 million bopd. These are pipelines that are approved and presenty under construction. WTI then be used by the Gulf Coast refineries instead of foreign crude from Saudi, Nigeria, etc which is priced at the world price.
This should be good news for anyone holding Canadian oil stocks and Canadian taxpayers as the discounts that we get for our crude is estimated to amount to $30 billion per year in lost revenues, taxes and oil company revenues. It will also be good news for anyone holding Bakken stocks. A $20 boost in price will make a big difference to their profitability.
The pipeline projects approved and coming on stream in 2013 and 2014 are Seaway Reversal, Line 9 Reversal, Keystone Gulf Caost Access and the Flanagan South project.