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Brent-WTI Spread Widens as Rockies Barrels Get Squeezed · The Gathering Line

• 0:00
  Saturday, October third.
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  Here's what moved since Friday morning, and what it means for Rockies and Bakken
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  barrels.
• 0:07
  Global first.
• 0:09
  Brent settled Friday at one hundred two dollars and twenty five cents,
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  down six cents on the day and up about a tenth of a percent on the week.
• 0:17
  The catalyst was the G7 and the European Union agreeing to coordinate a release of
• 0:21
  one hundred million barrels through the I E A over four months.
• 0:25
  That's fifty million barrels of European diesel and fifty million of crude,
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  with French President Macron describing the four month timeline.
• 0:33
  The pressure fell on W T I, not Brent, and that's what matters for us.
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  W T I settled at ninety one eleven, down a dollar seventy six,
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  after touching an intraday low of eighty eight oh six.
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  It's down about one point six percent on the week.
• 0:48
  The Brent premium over W T I blew out to eleven dollars and fourteen cents.
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  That's a strong pull on Gulf Coast waterborne exports, and it tells you where
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  marginal barrels want to go.
• 0:59
  Geopolitics stayed noisy.
• 1:01
  Persian Gulf exports are back near prewar levels but erratic.
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  UKMTO reported a crude tanker struck by an unidentified projectile off Oman,
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  and the U.S.
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  is sending a third carrier strike group.
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  Desk reports also say Chinese refiners suspended refined fuel exports for October,
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  Ukraine hit Russian refining in Samara and Volgograd, OPEC plus delayed a capacity
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  review, and Barclays lifted its fourth quarter Brent forecast by twenty dollars to
• 1:28
  one fifteen.
• 1:30
  Those last items come from desk notes, and I haven't tied them to primary text,
• 1:33
  so weigh them accordingly.
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  North America.
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  Western Canadian Select at Hardisty widened to sixteen sixty five under W T I,
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  according to CalRock brokerage data.
• 1:43
  That's about a dollar fifty wider on the week.
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  The explanation is Midwest refinery turnarounds taking fewer heavy barrels,
• 1:50
  plus a strong front month W T I.
• 1:53
  Canadian rigs jumped eight to two hundred sixteen, per Baker Hughes.
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  Enbridge Express is reported running full into Casper.
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  Trans Mountain is running around sixty percent, but the four hundred twenty five
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  thousand barrel per day figure in my notes doesn't reconcile with that,
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  so treat it as soft.
• 2:10
  Pemex keeps trimming Maya exports to feed Dos Bocas.
• 2:13
  Nothing else material.
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  United States.
• 2:16
  The latest scheduled E I A release is Wednesday's, for the week ending September
• 2:20
  twenty fifth.
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  Commercial crude rose nine hundred twenty two thousand barrels to four hundred
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  twenty seven point three two million.
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  I don't have a consensus number, so I can't give you the surprise.
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  The regional split is the useful part.
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  The Midwest built one point zero four million to one hundred five point one one
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  million, and the Gulf Coast built three point four two million to two hundred forty
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  seven point five million.
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  The Rockies drew eight hundred twenty three thousand barrels to twenty two point
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  five million, which is about three hundred twenty three thousand below a year ago.
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  Cushing is where my notes disagree with themselves.
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  They cite tank bottoms near fourteen point six million barrels and also a range of
• 2:59
  twenty to twenty two million.
• 3:01
  I can't confirm the latest weekly Cushing figure, so I'll say only that it remains
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  thin and keeps prompt barrels at a premium.
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  Baker Hughes had the U.S.
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  rig count down one to five hundred ninety eight, which is forty nine above a year
• 3:13
  ago.
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  Enbridge's two point five five billion dollar Tallgrass crude deal,
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  including seventy five percent of Pony Express, was reported by R B N on September
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  fifteenth.
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  It's not new, but it changes who you'll negotiate with.
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  Uinta Basin.
• 3:27
  Nothing genuinely new in the last day, but the structure is worth restating.
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  Yellow wax is commanding about a three dollar twenty premium at Gulf Coast
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  refineries.
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  Salt Lake refiners cap out around eighty thousand barrels per day of waxy crude,
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  so every incremental barrel goes by rail or heated truck.
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  Freight to the Gulf runs sixteen to eighteen dollars, which eats most of that
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  premium.
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  The Uinta Basin Railway cleared the Supreme Court on its environmental review,
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  but my notes say it's still in Surface Transportation Board remand and Forest
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  Service right of way review.
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  Financing hasn't closed and construction hasn't started.
• 4:00
  For your Uinta terminal, rail loading is still the only commercial outlet.
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  On operators, SM Energy is integrating its XCL Resources stake,
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  and everyone else is holding a steady pace.
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  Bakken.
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  Production is steady around one point one nine to one point two million barrels per
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  day.
• 4:19
  Nothing from the Director's Cut this cycle.
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  My notes say gas capture is well above ninety five percent against a ninety five
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  point eight requirement.
• 4:26
  Those can't both be true, so I'm not leaning on that line.
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  Dakota Access is reported running near full, which leaves little pipeline room.
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  Clearbrook is trading a dollar fifty to two ten under Guernsey.
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  The rail question is whether that gap covers rail freight.
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  My notes put the freight penalty at ten to twelve dollars in one place and thirteen
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  to fifteen in another, so run your own numbers before Monday.
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  Operators reported nothing new.
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  Powder River.
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  Steady Niobrara and Turner drilling from Anschutz, Continental,
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  Devon, EOG and Peak.
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  On takeaway, my notes say Plains is buying Silver Creek's six hundred mile gathering
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  system for five hundred eighty five million dollars.
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  I couldn't trace that to a primary source, so hold it loosely.
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  They also say Kinder Morgan's Double H is converting to N G L service,
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  with the original target the first quarter of this year.
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  I can't confirm where that stands, and it matters, because it would pull a Dore to
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  Guernsey crude artery out of service.
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  Now Guernsey, GERN-zee, the section that matters most.
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  Light sweet is holding at eighty five cents over Cushing, unchanged,
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  which matches where we were in the last episode.
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  Against Clearbrook the premium is about two ten, and it widened over the week as
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  Midwest turnarounds left barrels stuck in the Midwest while egress south of Guernsey
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  stayed tight.
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  Storage there is full of Bakken, Canadian and Powder River crude,
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  and the outlet is the constraint.
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  Desk notes say Pony Express is heavily apportioned, with scheduled barrels trading
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  at a premium to tank crude.
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  I can't tie that to a tariff filing.
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  Capacity is also muddled, since R B N cited roughly four hundred thirty thousand
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  barrels per day in 2025 and my notes carry two hundred thirty.
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  The Tallgrass and Bridger joint tariff open season dates to February 2025,
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  so nothing new there.
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  Bridger's proposed five hundred fifty thousand barrel per day line from the border
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  to Guernsey is a plan, not capacity.
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  So the netback picture is this.
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  A shipper can take proration on Pony Express and Platte, dump barrels at a discount
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  into Clearbrook, or pay the rail penalty.
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  With a wider Brent premium pulling Gulf barrels out and Midwest refiners down,
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  the Rockies are getting squeezed.
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  Watch Monday's apportionment notices first.
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  That's the brief.