The Expansion Of The Seaway Oil Pipeline Is One Of Several Factors Ushering In An Era Of Cheaper Gasoline

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Good news, car drivers: The pump price for gasoline is headed south. And the trip appears to be one-way.

There are several reasons why it is getting cheaper to drive. One has to do with West Africa, another with China, a third with Saudi Arabia and a fourth with Europe. But the main reason has to do with a 30-inch crude oil pipeline between Oklahoma and the Gulf of Mexico.

Known as the Seaway pipeline, it carries crude oil, known as West Texas Intermediate ( WTI ), from a huge terminal complex at Cushing, Okla., to the Texas Gulf Coast. Earlier this week the pipeline's owners completed expanding the pipeline's capacity from 150,000 barrels per day to 400,000 barrels per day. That increase in WTI supplies gave gasoline refiners on the Gulf coast an alternative to a much more expensive crude oil, known as Brent blend, that they have been importing from Europe. Refiners have been forced to pay for Brent because there has not -- until this week -- been adequate pipeline capacity to transport less-expensive WTI from Cushing to the Texas Gulf Coast.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Commodities

Referenced Stocks: WTI

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