Will BP plc (ADR) (BP)’s Updated Whiting Refinery Affect Crude Prices?

Additionally, new and reversed pipelines are allowing more crude oil to flow directly from oil and gas hot spots, such as the Permian Basin of West Texas, to Gulf Coast refineries. For instance, Magellan Midstream Partners, L.P. (NYSE:MMP)’ started up its reversed Longhorn pipeline in April, which provided another 225,000 barrels per day of incremental capacity from West Texas to Houston-area refineries, while Sunoco Logistics Partners L.P. (NYSE:SXL) is expected to start up its Permian Express project this month, which will provide additional capacity out of the Permian Basin of about 90,000 barrels per day.

The bottom line
All told, the completion of the Whiting modernization project and other refinery start-ups have helped boost U.S. crude processing capacity to an eight-year high for the week ended July 12. Meanwhile, the start-up of new pipeline projects has helped bring crude inventories at Cushing down nearly 12% from their January peak of 51.9 million barrels. Given this backdrop, the recent strength in WTI prices may continue for the rest of the year, or at least until the glut at Cushing is transferred to the Gulf Coast.

The article Will BP’s Updated Whiting Refinery Affect Crude Prices? originally appeared on Fool.com.

Fool contributor Arjun Sreekumar has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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