Crude oil stockpiles in Cushing are at their lowest levels in two years after new pipeline projects have begun moving oil more easily to refineries along the Gulf Coast.
Despite the increased oil flow, the U.S. Energy Information Administration this week said the new pipelines — along with increasing domestic oil production — are expected to hold down the price of West Texas Intermediate crude, which is set in Cushing.
The pipeline projects have been expected to narrow the price gap between West Texas Intermediate and the international Brent crude price.
“EIA expects strong U.S. crude oil production growth will help reduce WTI prices to an average of $95 a barrel this year,” administration Administrator Adam Sieminski said as part of the updated Short-Term Energy Outlook.
The agency also said it expects the Cushing-priced crude to average $90 in 2015.
The Brent crude price is projected to average $105 a barrel this year and $101 next year, representing a premium of $10 a barrel in 2014 and $11 a barrel in 2015.
Domestic crude traded at a discount of as much as $30 a barrel before new pipeline projects began coming online last year.
Crude oil is a global commodity priced largely based on global supply and demand trends and geopolitical concerns.
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