By Ayenat Mersie NEW YORK: The glut in the is likely to persist as regional producers show no signs of slowing production, which could drive regional prices even lower, said on Friday. While output in the basin of has soared, pipeline construction has not kept up, causing local prices to reach their widest discount to U.S. futures in 3-1/2 years last month at $13. They are now trading about $9 below benchmark U.S. futures . Producers' bearish views on pipeline alternatives like trucking and continued high rates of production are likely to depress local prices further, the bank said. Goldman said it anticipates a discount of Gulf Coast prices around $19-$22 per barrel from the fourth quarter of this year to the third quarter of 2019. In early June, the bank anticipated the peak Permian discount to crude on the Gulf Coast would be $21, to be reached in the first quarter of 2019. This in turn could contribute to the widening difference between the price of U.S. benchmark futures and global benchmark Brent . The transportation bottlenecks have also contributed to the wide difference between the price of U.S. crude futures and Brent, traders and analysts said. On Friday, U.S. crude futures traded as much as $9.23 below Brent.
An ongoing glut of Permian shale oil combined with a shortage of pipeline capacity will likely see a discount of Gulf Coast prices of $19-$22 per barrel from Q4 of this year to Q3 2019, said Goldman Sachs. The price drop is expected to be more pronounced in the second half of 2019 as production declines and refiners are forced to cut back on their crude inventories, according to analysts, who expect Brent