Oil takeaway capacity from the Permian Basin, the largest U.S. shale field, is expected to tighten next month due to scheduled pipeline maintenance, which is already driving up the premium for delivered WTI into East Houston.
The 642-mile Wink-to-Webster pipeline, operated by Exxon Mobil and which ships more than 1 MMbbl/d of crude and condensate from the Permian Basin to the Gulf Coast, is due downtime next month for a 10-day scheduled maintenance period.
"Of course that means crude oil supplies are supposed to back up in the Permian Basin while crude oil inventories are drawn along the Gulf Coast," said Andrew Lipow, president of Lipow Oil Associates in Houston.
The spread between West Texas Intermediate (WTI) crude and the same grade delivered to Magellan's East Houston terminal (MEH) hit its widest point on April 29 at a $1.25/bbl premium, the widest since early June 2021, according to LSEG data.
Recommended Reading
Markman: Want CO2 Gone Now? Well, You Don’t Always Get What You Want
2024-04-29 - A slew of scenarios shows that climate goals can be achieved with the use of fossil fuels and CCUS.
Romito: Net Zero’s Costly Consequences, and Industry’s ‘Silver Bullet’
2024-04-22 - Decarbonization is generally considered a reasonable goal when presented within the context of a trend, as opposed to a regulatory absolute.
Google Exec: More Collaboration Needed for Clean Power
2024-04-17 - Tech giant Google has partnered with its peers and several renewable energy companies, including startups, to ramp up the presence of renewables on the grid.
‘Unapologetic,’ Barclays Restarts E&P Coverage: ‘The World Needs Oil and Gas’
2024-04-10 - Barclays analysts, in restarting coverage of E&Ps, presented anti-hydrocarbon investors with “a reality check on energy transition.”
Ørsted Names New CFO, COO Following 2023 Setbacks
2024-02-27 - Ørsted appointed Trond Westlie as CFO and executive board member and Patrick Harnett as COO following company difficulties in 2023, including a $4 billion impairment charge in third-quarter 2023.