The reversed Seaway oil pipeline delivered the first crude from the Cushing, Oklahoma, trading hub to the Gulf Coast on Wednesday, a historic step aimed at easing the glut of crude in the U.S. Midwest, partners Enterprise Products and Enbridge Inc announced.
"The arrival marks the first southbound delivery of crude by pipeline from the oversupplied Cushing hub, and gives producers access to all of the major refiners in the Greater Houston area and Texas City," a news release said.
The glut at Cushing, Oklahoma, the delivery pint for the New York Mercantile Exchange futures contract, has depressed the price of U.S. oil relative to the Brent benchmark.
The crude reached the Jones Creek terminal near Freeport south of Houston, more than 500 miles south of Cushing, at 11 a.m. CDT ( 1600 GMT), and the pipeline had reached the planned initial rate of 150,000 barrels per day, the news release said. The oil started the journey at Cushing May 19.
Market reaction was the opposite of what was expected when reversal was announced last fall. The hope was to bring depressed U.S. and Canadian crudes more in line with the world market as Cushing emptied.
West Texas Intermediate crude rose for the day, but not as much as North Sea benchmark Brent, widening the spread to $15.62 in favor of Brent at settlement from $14.55 Tuesday.