Credit: Jared Anderson/Breaking Energy
Record setting US oil production growth is altering physical oil flows, flipping supply-demand fundamentals and leaving market observers searching for tools that can provide insight into these new price formation elements. Pipeline reversals and infrastructure expansion along the Gulf has debottlenecked the Cushing, Oklahoma storage hub, which has redrawn traditional oil grade basis differentials. Energy market analysis firm Genscape just released a new product designed to provide supply chain transparency that can help industry players “see” how newly configured infrastructure is impacting US oil market dynamics.
“The incremental barrel produced is now heading to the Gulf during periods of oversupply or high refinery demand,” Dominick Chirichella of the Energy Management Institute said in a statement. “Without the economic incentive to store oil at Cushing, physical and financial players will be making moves based on activity in the Gulf.”
Genscape told Breaking Energy they are seeing high demand for the new product that will have a tiered pricing model depending on how many of the services one would like to purchase, but they declined to share specific pricing information.
The world of market data and intelligence has come a long way from counting tankers transiting the Strait of Hormuz and firms now take advantage of new technology to gain market insight. Specifically, the new Genscape offering – which is called the U.S. Gulf Coast Oil Supply Chain Service – uses a range of patented, proprietary monitoring technology and a team of market experts, to provide granular inventory levels, 30-minute pipeline flows, and real-time camera tracking of refinery performance, they said in a statement.
The firm also released a white paper that details the new crude oil pricing environment and considers the potential for a new Gulf Coast crude oil price benchmarks:
