Inability to export will fuel US supply glut
The US bans exports of domestic crude and there has been much speculation that because of rising production, it would soon lift the ban but the White House cooled those hopes in a statement just released.
The White House said it does not support a House bill that would lift the ban. However, they said the final determination will be left to the Commerce Dept. This means Obama isn't threatening to veto it. Still, it's hard to see how the Commerce Dept would support it without the White House's backing.
At the moment, the US isn't producing enough to meet all US demand but combined with Canadian oil it is. The vast majority Canadian oil is shipped to the United States but once it's mixed with US oil, it can't be exported from there. There was even talk of making some pipelines to the Gulf 100% Canadian oil only because if a single drop of US oil is mixed in, it can't be exported.
The easy solution would be to lift the ban but with US oil, it's never easy.
WTI crude oil prices dropped to $44.00 from $44.50 on the headlines.
Update: Into settlement WTI bounced back to gain 1.3% to $44.59.
The important caveat on the White House headline was that they're leaving the decision to the Commerce Dept so it comes down to what they think (or get 'lobbied' to think).
