markets

Crude in West Texas Is Cheapest in Three Years Versus Europe

The silhouette of an electric oil pump jack is seen near a flare at night in the oil fields surrounding Midland, Texas.

Photographer: Luke Sharrett/Bloomberg

Oil traders with access to pipelines out of West Texas to export terminals along the Gulf Coast are raking it in from the rapid supply growth in the Permian Basin. The 800,000 barrel-a-day output surge in the past year has outpaced pipeline construction and filled existing lines, pushing prices of the region’s crude to almost $13 a barrel below international benchmark Brent crude, the biggest discount in three years. That’s about double the cost to ship the oil via pipeline and tanker from Texas to Europe, signaling U.S. exports are likely to increase.

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