A number of refiners are weak today. In the long run, it may be good news for consumers.
Crude oil transporter Enbridge announced it was going to buy Conoco's 50 percent stake in a pipeline that ran from Freeport, Texas, to Cushing, Okla., for $1.15 billion and reverse the flow of oil. About 150,000 barrels a day will go from Cushing to the Gulf Coast by the middle of next year, and 400,000 by the first quarter of 2013.
Why is this important? Because refiners have been able to play a neat trick, profiting from the nearly $20 price difference between West Texas Intermediate (WTI) and Brent crude. Gasoline prices do not trade off WTI, they trade off Brent crude. Some refiners can buy oil at $99 a barrel, but sell gasoline based off the Brent crude price. Those margins will now be under pressure.