Yesterday (April 30, 2014) the Energy Information Administration (EIA) reported yet another increase in Gulf Coast inventories as of April 25 - adding 5.7 MMBbl to set a new record of over 215 MMBbl of crude. Stocks in the region are now 27 MMBbl above the 5-year average and even if refiners cranked up output to the highest levels ever (96.5 percent utilization) the surplus would take at least 3 months to get back to “normal”. Crude prices are being impacted as the premium of Light Louisiana Sweet (LLS) crude at the Gulf Coast over West Texas Intermediate (WTI) delivered to Cushing, OK has narrowed close to $2/Bbl. With no crude exports allowed to ease the surplus it looks like Gulf Coast prices will remain under pressure. Today we look at prospects of reducing the crude surplus.
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