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Or said differently: when Brent flies, and WTI dies.

The energy industry has the appearance that it is about to undergo a major shift in pricing structures again. We saw it lately with the spread between crude and NG blowing out. We have seen signs of it happening in Brent and WTI before, and I expect we will see new signs of it again.

To be clear, we could see extremely expensive Brent oil, as international supply fears increase with tension in Iran. This would be happening while the price of WTI, a lighter sweeter standard, crashes in U.S. terms due to its own oversupply and lack-of-demand issues.

This would all be happening under a backdrop of world markets bidding for refined products from a U.S. export-happy refining complex. This would lead to U.S. gasoline prices hitting all-time highs, while refinery complexes in the U.S. Midwest would have the highest profit margins in their history.

The U.S. Midwest is growing its own domestic sources of oil, while its own capacity to ship the oil out is limited. This causes a bottleneck in exports in the region. This is causing the price locally to crash.

The planned refinery work in the Midwest has lowered the take-off demand for Bakken oil. This is happening inside of a window of time while the Bakken production sets all new records every month.

This is causing the price of oil in the Midwest to crash in localized markets, as the take-off capacity does not equal the supply of new barrels. The region is buried in supply, all of which is now seeking a path to the Houston refining complex.

The price difference of an equivalent grade of oil in Bakken Terminals & Louisiana terminals is now $40. This imbalance in like qualities will generate a short term arbitrage trucking bonanza, as the profit per trip approaches silly levels.

I expect to hear about a fleet of white trucks driving loads of crude oil from the Midwest to the refining complexes with accessible pipelines capacities. You don’t have to drive it all the way there, to deliver it.

I wish I had a fleet of modern fluid haulers right now. There is more oil supply in the Bakken than local demand, and that won’t change much when the refinery’s turn around. The Bakken supply is still growing every month, and will for a while.

The growth in rail take-off capacity will not keep up with the growth in new oil production in the near to intermediate term. This will lead to price differentials that will last longer than people expect. There is always a profit to be made when these events happen. It will be interesting to see who ends up owning those fleets of white trucks.

Just like the old gold rush stories of stores making more than people digging for gold, there just might be more money made in shipping the oil by truck, than there is in producing or refining it. As they say, this could get interesting in the near-term.