The global oil market is shortchanging American oil producers. The primary global benchmark, Brent, was recently around $62 a barrel. The main domestic benchmark, WTI, on the other hand, traded at roughly $53.50 a barrel. Because of that discount, U.S. oil companies are earning about $8.50 less per barrel than their global peers. With oil companies currently pumping out more than 11 million barrels per day (BPD) from beneath U.S. soil, it means they’re missing out on nearly $100 million of revenue each day.
The main issue causing the discount in U.S. crude prices is that there isn’t enough refining capacity in the country to handle its growing gusher of crude from shale fields. That’s leading several energy companies to work on solutions that would narrow the shortfall. The latest entrant in the race to build more export capacity is refining giant Phillips 66 (NYSE:PSX), which is proposing a new deep-water oil export terminal off the coast of Texas. It’s the ninth such project aimed at making America an energy export juggernaut.
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Source: The Motley Fool, LLC.