The Untold Story in US Oil Production: Booming Pipelines

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oil pipeline
Oil pipeline
oil pipeline
Oil pipeline

You probably heard that, according to the American Petroleum Institute, the United States is sitting on more oil than it has ever had in 80 years. That’s right. The US is sitting on a massive oil supply glut that is at an 80-year high. It is no surprise then that this massive oversupply is pushing down the price of global crude.

This development is nothing new. This development is widely known. What isn’t widely known is the fact that there is a boom in oil pipeline construction. Whether you are talking about the far corners of North Dakota being lined with a new pipeline that connects North Dakota with Wyoming, or West Texas where crude from the oil-heavy Permian Basin is efficiently transmitted to refineries around Houston, there is a pipeline boom going on in the United States. This can translate to even lower prices at the pump.

As more and more of America’s oil glut makes its way to refiners, expect a rising chunk of that refined product to leave the United States. Keep in mind that, according to US law, unprocessed oil cannot be exported. However, the loophole is that refined gasoline can be exported. If current oil production levels keep rising and pipelines become even more numerous and efficient in hooking field production to refinery infrastructures, expect total American gasoline output to increase. Any export of this huge amount of American gasoline is sure to put yet more downward pressure on the price of oil.

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