Oil prices surge as glut of crude builds
Lincoln - The Nebraska legislature voted unanimously Wednesday to advance a proposed law that would reroute the controversial TransCanada Keystone XL pipeline to avoid the sensitive Sandhills and Ogallala aquifer as crude prices surged to more than $100 per barrel.
Trading closed at a five-month high after a Canadian energy company ended the standoff by agreeing to shift the route of the proposed TransCanada pipeline out of the environmentally sensitive areas of Nebraska.
The agreement has two companies, Enbridge Inc. and TransCanada Corp., setting in forward motion plans in keen competition to undo a year of EPA stalling. Earlier this month the Department of State and the Obama Administration announced plans to stall until after the elections of 2012 to give final approval for the international agreement that would allow the pipeline to be built from the Alberta tar sands to the refineries of Houston and Port Arthur.
A glut of oil that has built up in the Midwest has created what has been described as an unprecedented distortion in crude markets, with the global Brent crude benchmark trading for about $9 a barrel more that domestic West Texas Intermediate. The gap, which had been more than $12, narrowed Wednesday as U.S. crude rose about $3 to $102.59, while Brent fell 51 cents to $111.67.
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