Its current 50% discount off light, sweet crude was, until recently, unheard of.
Libyan exports were largely-composed of light sweet crude, which is what U.S. produces.
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The U.S. will release 30 million barrels of light sweet crude from its Strategic Petroleum Reserve over next 30 days.
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In fact, OPEC recently announced that worldwide production of sweet crude may have peaked and is now on the decline.
In China, where much of the growth in oil demand is generated, 80% of refining capacity is dedicated to sweet crude.
Currently the SPR is the fullest it has ever been, with 727 million barrels of mostly light, sweet crude in storage.
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Although 75% of the worlds crude is sour but something like 40% of the worlds refineries are geared to sweet crude.
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Cushing is the price settlement point for West Texas Intermediate Sweet Crude Oil on the New York Mercantile Exchange (NYMEX).
Sweet crude is low in sulfur which makes it cheaper to refine.
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Light sweet crude is depleting quickly, and now the industry is going after heavy crude and tar sands and thermally enhanced oil.
The North African nation had produced about 2% of world production, about 1.6 million barrels of sweet crude oil per day, most of which was exported to Europe.
Because there is so much excess capacity in the worlds refineries, because there is a fair range of capabilities in that excess capacity and because if there was not enough refining capacity to handle all the sour crude that is available, the price of sour crude would be selling at a greater discount to sweet crude than the current modest discount.
Bakken crude is a sweet, light crude that typically has a gravity of 40 to 42 degrees, ideal for most U.S. refineries.
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As a result prices for sweet light crude tends to be higher than heavier or sour crudes.
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World production of sweet light crude oils occurred a few years ago.
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The oil, from producers in western Canada, is gooey, acidic and high in sulfur--harder to refine than benchmark West Texas Intermediate (light, sweet) crude.
Sweet light crude oil yields the most gallons of gasoline per barrel of oil and since it has low viscosity and low density, it is comparatively inexpensive to pump, transport, and refine.
The ongoing conflict there has resulted in the removal from global markets of roughly 1.6 million barrels per day of light, sweet high-quality crude oil a total of more than 150 million barrels displaced since the conflict began.
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North Sea Brent and WTI, the two benchmark crude oils are both sweet, light.
So more profits are generated per barrel of sweet, light than heavier or sour crude oils.
World crude oil production has in some cases already peaked (sweet, light) while others (heavy, sour) it has yet to be will soon.
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