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
EOG: Utica Oil Can ‘Compete with the Best Plays in America’
2024-05-09 - Oil per lateral foot in the Utica is as good as top Permian wells, EOG Resources told analysts May 3 as the company is taking the play to three-mile laterals and longer.
ShearFRAC, Drill2Frac, Corva Collaborating on Fracs
2024-03-05 - Collaboration aims to standardize decision-making for frac operations.
Crescent Energy: Bigger Uinta Frac Now Making 60% More Boe
2024-05-10 - Crescent Energy also reported companywide growth in D&C speeds, while well costs have declined 10%.
Diamondback May Go Nuclear to Power Permian Basin Ops
2024-04-08 - Oklo Inc., a California fission power plant developer, on April 8 said it signed a letter of intent to collaborate with Diamondback Energy on implementation of nuclear energy for drilling operations in the Permian Basin.
E&P Highlights: April 29, 2024
2024-04-29 - Here’s a roundup of the latest E&P headlines, including a new contract award and drilling technology.