Oil Prices Fall To Lowest Level In Four Months

Surging US oil production is impacting trade flows and price differentials more than global supply levels and benchmark pricing according to analysis from the Oxford Institute for Energy Studies. But that could change over the longer term as backed out West African crudes play a larger role in Brent price formation. “While the USA largely backed out WAF grades by the second half of 2013, as domestic output and infrastructure continued to improve, this year has seen a significant increase in US crude exports to eastern Canada. As a result, Canadian imports of WAF crudes have fallen, implying that there is more crude oil available for clearing in the Atlantic Basin. In a way, WAF has become the swing barrel heading to North America, depending broadly on WTI–Brent differentials.” [OIES]

The UN Intergovernmental Panel on Climate Change sent a major draft report to governments on Monday and the AP “obtained” a copy, which paints a gloomy picture. “Continued emission of greenhouse gases will cause further warming and long-lasting changes in all components of the climate system, increasing the likelihood of severe, pervasive and irreversible impacts for people and ecosystems,” the report says. The final report will be issued after governments and scientists go over the draft line by line in an October conference in Copenhagen. [AP]

Appalachian Resins announced plans to construct an ethane cracking plant in Ohio. “The approximately $1 billion integrated Ohio facility will be able to process approximately 18,000 barrels per day of ethane into ethylene and polyethylene and will easily tie into the region’s pipeline and storage network, Cutler continued.” [Rigzone]