Bakken Strengthens as Enbridge Completes Pipeline Expansion

Bakken’s discount to domestic benchmark West Texas Intermediate narrowed to the lowest level since Dec. 20 after Enbridge Energy Partners LP (EEP) executives announced pipeline expansions are in service.

The crude produced in North Dakota’s Williston Basin gained $1.25 a barrel to trade at a 25-cent discount to WTI at 12:16 p.m. in New York, according to data compiled by Bloomberg.

“It’s all part of the takeaway capacity that’s needed as Bakken production has gone from virtually zero in the middle of last decade to 650,000-700,000 (barrels) a day and continues to increase,” said Andrew Lebow, a senior vice president at Jefferies Bache LLC in New York. “It’s had a climb. I don’t think (the expansion) is going to have a bearish impact.”

Enbridge’s Bakken Pipeline Expansion Project adds 145,000 barrels a day of capacity from North Dakota to Saskatchewan and Manitoba, according to a company statement.

Gulf Coast crudes strengthened as WTI lost ground to Brent. WTI weakened 55 cents to trade at a discount of $20.15 a barrel at 1:34 p.m. in New York. When Brent gains versus WTI, it typically strengthens the value of U.S. grades that compete with foreign oils priced against the European benchmark.

Heavy Louisiana Sweet’s premium to WTI widened 75 cents a barrel to $22.25, while Light Louisiana Sweet gained 45 cents a barrel to trade at $21.60 over WTI.

Mars Blend’s premium rose by 25 cents to $17.10 a barrel, while Poseidon’s gained 25 cents to $17.25 a barrel over WTI. The premium for Thunder Horse, which has a lower sulfur content than Mars, Poseidon and Southern Green, rose by 40 cents to $19 a barrel.

To contact the reporter on this story: Eliot Caroom in New York at ecaroom@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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