Cheaper Oil and Gas Give a Lift to the Refining Business - NYTimes.com

The drilling boom has allowed many refiners to buy crude at a huge discount — sometimes $20 or more a barrel — below international benchmark prices. That is especially true for refineries that operate in the core of the country, where there is a glut of crude from the North Dakota Bakken shale formation because of insufficient pipelines. Historically, until the last couple of years, American crudes typically were priced 50 cents to a dollar higher than international crudes.

The price advantage of United States refiners over their foreign competitors helped the country last year become a net exporter of refined petroleum products for the first time since the late 1940s, producing nearly $10 billion in annual revenue from daily net exports of 370,000 barrels a day of gasoline and diesel...“This is a huge competitive advantage,” said William R. Klesse, Valero’s chief executive and chairman. “The change in oil and gas production is the biggest thing in my career, and I’ve been through the Arab oil embargo, price controls, the Iraq-Iran war, the price break in 1986, and the Iraq and Afghanistan wars.”