US Shale Reserves Help Crude Oil vs Brent
The US shale oil market is thriving, and this is helping keep US oil prices down, especially in relation to the Baltic Sea’s Brent Oil which is popular in northern Europe. This increased production is also helping the US reduce their reliance on foreign oil supplies.
The US Gulf Coast’s Light Louisiana Sweet (LLS) is now $0.15 above Brent oil – the lowest price premium since 1988. The highest premium was $4.02 in 2008. LLS oil is well regarded in the marketplace because it is low in sulfur and dense, making it easier to process into gasoline. As such, it trades at a premium to Brent oil.
US imports of oil have dropped 56% since 2010, and this is in large part due to the Eagle Ford reserve in Texas, and Bakken reserve in North Dakota — both shale reserves. Shale oil has historically been very difficult to produce, however recent gains in technology have allowed significant increases in production and keeping costs down. In addition, new pipelines such as the Seaway/Keystone Pipeline.
The Seaway/Keystone Pipeline has also allowed Canadian oil to enter the US market at record rates, especially from Alberta.
Brent Oil October futures closed at $114.25 per barrel – up $0.76.
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