Bakken crude sank to the lowest in more than 19 months relative to the U.S. benchmark as inventories in the northern Midwest climbed to a record while production of a competing crude grew.
Bakken oil priced in Clearbrook, Minnesota, weakened by $2.75 to $15.75 a barrel less than West Texas Intermediate in Cushing, Oklahoma, at 4:05 p.m., according to data compiled by Bloomberg. It’s the largest discount since March 16, 2012.
Bakken is a light, sweet crude from the namesake shale formation in North Dakota and Montana. Production from North Dakota’s portion of the field grew to 847,160 barrels a day in August from less than 10,000 in 2006 on improved use of horizontal drilling and hydraulic fracturing.
“They’re running into a situation where they’re just not able to move it out fast enough,” Carl Larry, president of Oil Outlooks & Opinions LLC, said by phone from Houston.
Crude supplies in the Midwest excluding Cushing rose by 513,000 barrels to 68.7 million, the highest level on record, according to data from the Energy Information Administration.
The Syncrude upgrader in Alberta produced 308,300 barrels of synthetic light, sweet crude a day in October, the most since April, according to the website of Canadian Oil Sands Ltd., the plant’s operating partner.
Enbridge Inc.’s Mainline lines 2 and 3 from Alberta to Superior, Wisconsin, carry as much as 832,000 barrels a day of light oil and were overbooked by 17 percent for November, the company said in an e-mailed statement.