With the expansion of the Seaway pipeline moving crude out of Cushing and towards the Gulf refineries, will we see a rise in the WTI crude prices?? Any normalization between Brent and WTI prices? And what impact will this have on the unit distribution from BPT?
Your post answers the questions I had on this matter. Thus Alaska oil is trading closer to BRENT pricing but because of the trust document BPT is stuck with WTI pricing which implies that BP as the operator can keep the $14+ difference. If true not a bad profit generator for BP.
Perhaps you should ask why BPT oil is not priced close to BRENT prices since there is no transportation bottle neck for the Prudhoe Bay oil. The Valdez terminal can ship the oil anywhere in the world and the oil is treated at Prudhoe Bay before going into the pipeline primarily to protect the pipeline from sour crude. There are some other pricing considerations such as viscosity but the Cushing bottleneck affecting WTI pricing should not be one of them.
Not true Kurt. The Valdez crude by law can only go to US ports. Years ago they had an exception for two Italian flag VLCCs to run crude to the Caribbean(Hess?) from Valdez. But that was the only Valdez crude going foreign. All of the rest of the tankers calling at Valdez are US crewed and flagged going to west coast ports.