California Is Buying Oil From OPEC, and Texas Is Sitting on a Glut of Crude 500 Miles Away!
Shipping crude oil from the Gulf Coast to California, a distance of just over 500 miles, takes weeks due to a severe lack of ground infrastructure, resulting in the black gold being carried via tanker through the Panama Canal.
Even worse for California refiners, due to the Merchant Marine Act of 1920, also know as the Jones Act, the cost to carry American crude by sea is 10 times more expensive than the current market rate. California currently imports 24% of its crude from Saudi Arabia and another 13% from Iraq. With a glut of crude oil in America's heartland, who is profiting from the Jones Act and shouldn't Congress make a temporary compromise to ween ourselves off OPEC crude?
Could this stock spell doom for OPEC?
Imagine a company that rents a very specific and valuable piece of machinery for $41,000... per hour (that's almost as much as the average American makes in a year!). And Warren Buffett is so confident in this company's can't-live-without-it business model, he just loaded up on 8.8 million shares. An exclusive, brand-new Motley Fool report reveals the company we're calling OPEC's Worst Nightmare. Just click HERE to uncover the name of this industry-leading stock... and join Buffett in his quest for a veritable LANDSLIDE of profits!
This segment is from Thursday's edition of "Digging for Value," in which sector analysts Joel South and Taylor Muckerman discuss energy and materials news with host Alison Southwick. The twice-weekly show can be viewed on Tuesdays and Thursdays. It can also be found on Twitter, along with our extended coverage of the energy and materials sectors, @TMFEnergy.
The article California Is Buying Oil From OPEC, and Texas Is Sitting on a Glut of Crude 500 Miles Away! originally appeared on Fool.com.Joel South has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends Kinder Morgan. The Motley Fool owns shares of Kinder Morgan. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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