Finance News

U.S. Gulf Coast Dominates New Oil Landscape; Genscape Launches Unprecedented Supply Chain Monitoring to Deliver Market Transparency

GenscapelogoThe Seaway line reversal in May of 2014 marked a turning point in the North American crude oil market with the draining of record stocks at the Cushing, Oklahoma storage hub. Attention has now shifted to the U.S. Gulf Coast and its capacity to move, store, refine, and export the glut of U.S. crude oil.

The goal of Genscape's new U.S. Gulf Coast Oil Supply Chain Service is to provide a holistic view of market fundamentals in the region to help traders, analysts, hedge funds, and infrastructure owners stay ahead of the evolving supply-demand dynamic. Using a range of patented, proprietary monitoring technology and a team of market experts, the comprehensive service provides granular inventory levels, 30-minute pipeline flows, and real-time camera tracking of refinery performance to provide unmatched transparency to this crucial region.

"We used to look at the Cushing storage hub for insight into the U.S. oil supply dynamic. That's not enough anymore," said Chris Sternberg, managing director of oil at Genscape. "Now, we need to look at the Gulf Coast and understand in detail what's happening to the oil and where it's going. We're excited to be filling this information gap with granular, measured data on oil fundamentals that will help market participants manage risk and opportunities."

"The incremental barrel produced is now heading to the Gulf during periods of oversupply or high refinery demand," said Dominick Chirichella of the Energy Management Institute. "Without the economic incentive to store oil at Cushing, physical and financial players will be making moves based on activity in the Gulf."

Furthermore, "with more than eight million bpd of refining capacity, the Gulf Coast is quickly becoming the most critical location for crude spot market activity and potential benchmarks to reflect market value for North America," according to Genscape's latest white paper, The Evolving Domestic & Global Crude Oil Pricing Landscape: An Inside Look at the Gulf Coast Infrastructure & Supply Chain. The paper argues that the current fragmentation of spot markets in the Gulf is causing market participants to struggle and creates the need for "new, granular fundamental benchmarks to support market efficiency and spur price benchmark evolution."

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