Kodiak: Undervalued At $9

U.S. oil exports are poised to reach the highest level in 28 years as deliveries to Canada more than triple, helping bring down the price of the global benchmark Brent crude relative to U.S. grades.

CALGARY — It takes, on average, about six days to barge 150,000 barrels of oil sands crude along inland waterways from north of St. Louis to the refining hub of St. James on the Louisiana Gulf Coast. The route, including passage on the Mississippi River, is one being marketed by Jeffersonville, Ind.-based American Commercial Lines Inc. to oil sands companies hit hard by price discounts as an alternative path to the Gulf Coast refining corridor as major projects such as TransCanada Corp.’s Keystone XL have become mired in controversy and U.S. politics.

Crude headed for a seventh weekly advance in New York, the longest run of gains in almost four years, amid signs of global economic growth and concern that oil facilities in North Africa are vulnerable to militant attacks.

West Texas Intermediate crude rose after a U.S. government report showed that inventories declined at Cushing, Oklahoma, the delivery point for the contract. Futures climbed as much as 1% as the Energy Information Administration said that supplies at the storage hub dropped 652,000 barrels to 49.1 million in the week ended May 3. Nationwide stockpiles rose 230,000 barrels to 395.5 million, EIA data show.

Brent vs. WTI Brent Crude Oil Spot Price

West Texas Intermediate crude fell for the first time in four days before government data that may show U.S. stockpiles rose from an 82-year high. Saudi Arabia increased production to the most in five months.

By HiddenValueInvestor:Since September 4, Bakken spot crude oil prices have traded above the price of West Texas Intermediate spot crude oil prices. For most of 2012 Bakken spot crude oil prices traded at a discount to WTI prices and traded at a whopping $27.50 discount on February 9, 2012.

Goldman Sachs expects U.S. crude oil’s discount to international marker Brent to narrow to about $7.50 a barrel on average in the second quarter of 2013. U.S. crude oil, commonly known as West Texas Intermediate or WTI, has been pressured around its delivery point at Cushing, Oklahoma, by the rapid increase in shale oil production in the Bakken formation in North Dakota and at the Eagle Ford fields in Texas.