Date of this Version
Cornhusker Economics, University of Nebraska–Lincoln Extension, September 18, 2014
Glut? As motorists, none of us have observed the low prices that would accompany a gasoline glut. Yet, the US will soon face a glut of crude oil - the amount we will produce (along with imports) will exceed the amount we can process and transport. Evidence of the coming glut is the falling price of US petroleum relative to the world price. Since 2010, the price at Cushing, OK (West Tex-as Intermediate, or "WTI") has fallen to $10-15 per barrel below the world price, represented by the "Brent" price in Fig 1. Even within the US, the price at the new west Texas oilfields has fall-en to $17 per barrel below the Cushing price, simply due to inadequate transportation infra-structure.