A very informative look into domestic oil production and oil pricing in general .

“However, Midwest refineries are
generally designed to process light,
sweet oil, which means they can handle output from the Bakken but are not up to processing heavy oil from the sands.
Oil-sands crude needs to go to the Gulf Coast, where an army of sophisticated refineries are thirsty for heavy oil. All that is lacking is a pipeline to connect supply with demand, but at the moment there is no such pipe; thus, the supply glut at Cushing has discounted
heavy oil significantly. Western Canada
Select, the benchmark crude oil coming out of Canada’s oil sands, closed at US$ 74.73 per barrel on March 5, a 30% discount to WTI and a 40% discount to Brent. ”

HT/ Instapundit

Posted by John Galt