US refineries are nearing the limit of their capacity to process shale oil, according to Morgan Stanley. The oil industry is also facing a glut in natural gas as China and India ramp up production from fracking fields. It's likely capped at roughly 6 million barrels a day, Morgan Stanley says. In order to export the light shale oil, traders would have to offer a discount to gain market share. However, Morgan Stanley said the shale glut is good news for Canadian oil sand producers, which need light crude for blends, and middle distillate producers.
US refineries are nearing the limit of their capacity to process shale oil, according to Morgan Stanley. The oil industry is also facing a glut in natural gas as China and India ramp up production from fracking fields. In order to export the light shale oil, traders would have to offer a discount to gain market share. However, Morgan Stanley said the shale glut is good news for Canadian oil sand producers, which need light crude for blends, and middle distillate producers.