EAI, Inc. Announces the Release of its North American Crude Study Linking Cushing and Other Hubs to Local and Global Dynamics

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The Cushing crude hub will transition from transportation-constrained to market-constrained mode for light crude over the next 18-24 month period. Heavy crude supply and pricing is also transitioning with the Edmonton/Hardisty-Cushing-Gulf Coast corridor shifting from being pipeline-constrained to supply-constrained.

EAI, Inc. is releasing its “North American Crude Supply, Logistics, Refining and Pricing Outlook” study providing the most extensive information base, analytics and outlooks across all production areas, refining centers, transportation systems, and pricing/distribution hubs that comprise and drive the Canada, U.S. and Latin America crude business network. EAI, Inc. provides a bottom-up and integrated assessment of all relevant North American regions, all key Latin American countries and the global interactions between key global hubs and North America. EAI, Inc. also integrates its downstream business analytics and metrics to realistically drive the refining business and the entire crude supply chain that supports it.

EAI, Inc. defines the transition and timing of Cushing-Gulf Coast crude balances and implications for WTI pricing at Cushing relative to other inland crude hubs and global benchmarks landed Gulf Coast. The North American Shale Fairway, extending from Western Canada to the U.S. Gulf Coast, will experience over 1900 MBPD of incremental excess light crude that will exceed West Coast and Eastern Seaboard refinery market capabilities to absorb this crude. New pipeline, rail transport, and grade substitution economics will all contribute netback realizations for inland crude and will drive the movement and transportation modes for Bakken, Eagle Ford, Permian, and other inland crude streams. Both rail and marine capabilities are critical to support these long haul and sustained movements approaching over 1200 MBPD in just 3 to 4 years. EAI, Inc. provides detailed insights into the Eastern Seaboard and West Coast crude markets as well as the Gulf Coast in assessing access, sustainability, and likely pricing relationships. The basin netback value realizations set basin clearing prices and ultimately composite light/WTI clearing prices for Cushing. These factors will increase the effective transparency for WTI pricing at Cushing but with more complex price setting mechanisms.

Events in Latin American, Western Canada and the U.S. heavy crude market will result in the Gulf Coast becoming a major focal point for Canadian heavy crude. EAI, Inc.’s analytics indicate that the Gulf Coast market could support over 800 MBPD of Canadian bitumen blends towards the end of this decade driven by refinery expansions, higher utilization of existing coker capacity, and replacement/displacement of Latin American supply. Heavy crude movements through this corridor are expected to reach over 700-800 MBPD over the next four years thus utilizing more of the pipeline space going south as light crude movements south decline/moderate. This will represent approximately half of the southbound pipeline space (Flanagan South-Seaway and XL) and is likely to grow. EAI, Inc. provides a comprehensive outlook for the Western Hemisphere heavy crude market with a Deep Dive into all of the business components driving this market. The Cushing hub, is likely to share the role as a staging and blending point with Gulf Coast distribution hubs for heavy and light crudes.

These events will reshape the Western Hemisphere crude market and will have implications for the U.S. Gulf Coast, West Coast, and Eastern Seaboard refinery markets and how they interact with the surging inland light crude supply. Future interactions, both direct and indirect, between Cushing, Edmonton, the Gulf Coast, Eastern Seaboard, U.S. West Coast, Latin America, and other global crude hubs are examined as part the most comprehensive study North American Crude study available. All of these business dynamics and more are addressed in detail in this latest EAI, Inc. North American Crude study.

For more complete study highlights and information on EAI, Inc. visit the website http://www.crudehub.com.

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Joseph Leto
EAI, Inc.
(303) 469-5115
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