Title : WTI Snaps Back -- February 12, 2018
link : WTI Snaps Back -- February 12, 2018
WTI Snaps Back -- February 12, 2018
Active rigs:| $60.34↑↑ | 2/12/2018 | 02/12/2017 | 02/12/2016 | 02/12/2015 | 02/12/2014 |
|---|---|---|---|---|---|
| Active Rigs | 58 | 36 | 41 | 137 | 189 |
RBN Energy: Midland crude production, takeaway capacity and price differentials.
Permian crude oil production continues to march steadily upward, headed toward 3.0 MMb/d sometime in the next few months.
Most of the recent growth responsible for pushing total U.S. output past 10 MMb/d has come from increases in Permian volumes. Pipeline capacity out of the super-hot play is on the ragged edge of maxing out, and a myriad of new projects to relieve capacity constraints are in the works. Why then has the price differential between Midland, TX, and the Gulf Coast dropped over the past few weeks? Why did the Brent vs. WTI/Cushing spread crater? And what does this all mean for Midland-to-Gulf Coast transport deals getting struck for $2.00/bbl or less?
Today, we look at these developments, try to make sense out of the Permian/Midland crude oil market, and consider what the future might hold for West Texas barrels moving to the Gulf Coast.
We’ve talked frequently about increases in Permian crude oil production and the need for new pipeline takeaway capacity here in the RBN blogosphere. In December (2017), we detailed the latest wave of Permian pipeline projects including briefs on the planned Phillips 66/Enbridge Gray Oak Pipeline; Magellan Midstream Partners’ plan to build a set of connecting pipes between Midland, Corpus Christi and Houston; an expansion of the Magellan/Plains All American BridgeTex Pipeline from Midland to Houston; and the latest from Enterprise Products Partners: the planned conversion of one of its NGL pipes out of the Permian to crude service, also targeting Houston.
Through all of this, Enterprise continues to ramp up volumes on its Midland-to-Sealy pipeline, which is said to be flowing more than 200 Mb/d with expectations to hit its 450-Mb/d full volume by June. Also, EPIC is said to be laying pipe for its 550-Mb/d, 700-mile line from the Permian and Eagle Ford to Corpus Christi, and Plains announced the 185-Mb/d Cactus II expansion (to a total capacity of 575 Mb/d) from West Texas’s Orla, Wink South, Midland, Crane and McCamey points down to Corpus Christi.
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