North Dakota's Bakken Oil Finally Hits the East Coast

One of the consequences of the U.S. oil boom is that all that crude gushing out of the Midwest has outpaced our ability to move it around. The result is a series of bottlenecks like the one in Cushing, Okla., where there are now more than 50 million barrels of oil stuck in tanks the size of 747s. That’s about a three-day supply of oil for the U.S., just sitting there.

This glut has led to big disparities in gasoline prices across the U.S. Right now, drivers are paying about $3.75 for a gallon of gasoline in New England, vs. $3.55 in the Midwest. While refiners on the East Coast are stuck paying higher prices for internationally priced Brent crude, imported mostly from West Africa, their Midwestern counterparts have access to abundant supplies of cheap domestic oil priced against West Texas Intermediate, which is about $20 cheaper per barrel than Brent. Not only are their margins better as a result, they’re passing some of the savings on to drivers.