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Guernsey’s Pipe Squeeze: Brent Rises, Spot Rail Stays Shut · The Gathering Line

• 0:00
  Wednesday, October twenty first.
• 0:02
  Here's what moved overnight and what it means for your barrels.
• 0:05
  Global first.
• 0:07
  Brent is up two dollars and six cents, one point nine percent,
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  at a hundred and ten dollars and eighty five cents as of mid morning London,
• 0:14
  per Reuters.
• 0:15
  That's hovering just under five month highs.
• 0:18
  The driver is Iran.
• 0:20
  President Pezeshkian told state media the U S cannot expect dialogue while it
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  blockades and threatens Iran, and Foreign Minister Araqchi told the Financial Times
• 0:29
  Iran is fully prepared to defend itself.
• 0:32
  That undid Tuesday's pullback, when talk of Pakistani mediation took some air out of
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  the market.
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  Kpler counts at least eighteen vessel attacks over two weeks,
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  and LSEG warns the targeting now reaches the Gulf of Oman, which puts regional
• 0:46
  loadings and ship to ship transfers at risk.
• 0:49
  Separately, the Houthis claimed strikes on Aramco's Yanbu site and the Shaybah
• 0:53
  field.
• 0:54
  Saudi officials haven't confirmed operational damage, so treat that as a claim.
• 0:58
  Freight is the piece that touches you.
• 1:01
  R B N reports a very large crude carrier from the Gulf Coast to China hit a record
• 1:06
  of about eighty one million dollars earlier this month, and has eased to just over
• 1:11
  sixty five million as of Monday.
• 1:14
  Still extreme.
• 1:16
  On policy, O P E C plus baselines stay frozen through November ahead of the November
• 1:21
  first ministerial.
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  The I E A agreed to speed up a stock release of up to a hundred million barrels,
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  diesel first, though analysts said earlier that figure isn't necessarily fresh
• 1:33
  supply.
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  France is putting ten million barrels of diesel into the market.
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  North America.
• 1:39
  Western Canadian Select for November at Hardisty is flat, twenty five dollars and
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  fifty to fifty five cents under W T I.
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  Export trunklines out of Canada run near ninety three percent full.
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  Trans Mountain is capped near sixty percent, about four hundred twenty five thousand
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  barrels per day, because trans Pacific tanker freight shuts the arbitrage to Asia.
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  My read: that is the same freight number I just gave you, showing up as a Canadian
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  egress problem.
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  And Enbridge's Express is full at two hundred eighty thousand barrels per day into
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  Casper.
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  Remember that number, it matters at Gern zee.
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  Mexico, nothing material.
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  United States.
• 2:20
  The E I A Weekly Petroleum Status Report lands at ten thirty Eastern.
• 2:25
  Market sources citing A P I data reported a crude draw of four point nine three
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  million barrels for the week ending October sixteenth, against a consensus of a one
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  point three million draw, with gasoline and distillate down too.
• 2:38
  A P I is not the official number, so hold your view until E I A prints.
• 2:43
  For reference, last week's E I A showed commercial crude down eight point five five
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  seven million to four hundred fifteen point five seven seven million,
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  versus an expected draw of three tenths of a million.
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  Cushing built one point eight six two million.
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  The Rockies, PADD four, built three hundred fifty eight thousand barrels to twenty
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  two point seven one zero million.
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  On price, picking up from yesterday: the November W T I contract expired Tuesday at
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  a hundred and three sixty six, and the new prompt month is up two dollars and
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  thirteen cents at ninety nine ninety five.
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  Brent over W T I is about ten ninety.
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  The Department of Energy is offering to loan up to three hundred fifteen thousand
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  barrels from the one million barrel Northeast heating oil reserve,
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  with diesel above six fifty a gallon, per Reuters.
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  The Strategic Petroleum Reserve sits near two hundred eighty three million barrels,
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  the lowest since nineteen eighty two.
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  Friday's Baker Hughes count was flat at six hundred three, with Uinta gains
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  offsetting the Permian and Haynesville.
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  Pending regulatory review: Enbridge's two point five five billion dollar Tallgrass
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  crude deal, which includes Pony Express, and Hess Midstream's two hundred million
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  dollar purchase of Chevron's D J Basin gathering, with a twenty percent Saddlehorn
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  stake.
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  Uinta Basin.
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  Yellow wax wellhead postings hold at ten to fourteen dollars under Cushing.
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  Delivered Gulf Coast wax is indicated around W T I plus three twenty.
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  Take insulated railcar freight of sixteen to eighteen dollars and the basin netback
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  is eighty five fifteen to eighty seven fifteen, twelve eighty to fourteen eighty
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  under Cushing.
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  Salt Lake City postings match or beat that, so spot rail stays shut.
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  Five Salt Lake refineries are running full on wax, about eighty thousand barrels per
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  day.
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  Loadings are flat near a hundred and fifteen thousand, held up by minimum volume
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  commitments.
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  Energy Transfer's Price River terminal still awaits Utah air permits,
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  targeted late in the fourth quarter.
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  Wildcat's Helper terminal keeps expanding toward a hundred thousand.
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  The Uinta Basin Railway has zero track laid, still tied up in the S T B remand,
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  Forest Service review and bond financing.
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  Operators are steady.
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  Bakken.
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  North Dakota holds at one point one five three million barrels per day,
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  thirty three rigs, ninety six percent gas capture, flaring near a hundred and thirty
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  million cubic feet per day, per the latest Director's Cut.
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  Dakota Access is full at seven hundred fifty thousand, walk up tariff nine seventy
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  five against committed rates of five sixteen to seven fifty six.
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  Double H's conversion to N G L service is pulling sixty five to eighty eight
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  thousand barrels per day of southbound egress, which pushes barrels onto Dakota
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  Access, Enbridge and Bridger.
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  Rail to the Pacific Northwest and East Coast runs ten to fifteen dollars all in,
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  and even with Brent near a hundred and eleven, lease costs,
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  diesel surcharges and discharge fees keep spot rail closed.
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  Chevron is going from three Williston rigs to two by December for three mile
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  laterals.
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  Hess Midstream sees twenty twenty seven volumes down five percent before flattening.
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  Powder River.
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  Steady drilling from Anschutz, Continental, Devon, EOG and Peak.
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  Gathering has room.
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  The bottleneck is downstream, getting into Gern zee.
• 5:59
  Plains continues integrating Silver Creek.
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  Now Gern zee, which is where the day gets decided.
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  Guernsey Sweet is unchanged at eighty five cents over Cushing,
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  about a hundred dollars and eighty cents outright.
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  Clearbrook sits a dollar fifty to two ten under Gern zee, sixty five cents to a
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  dollar twenty five under Cushing.
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  Static overnight.
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  These are desk indications, not exchange prints.
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  Static does not mean healthy.
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  Pony Express is moving about two hundred thirty thousand barrels per day against
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  four hundred thirty thousand nameplate, because of heavy apportionment.
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  The Tallgrass Bridger open season offered volume tariff incentives,
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  but no physical expansion.
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  Platte, one forty five thousand capacity, is severely prorated toward Wood River and
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  Patoka.
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  Saddlehorn and Grand Mesa are full with D J barrels headed to Cushing.
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  Here is the squeeze.
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  Gern zee takes two hundred eighty thousand barrels per day of Canadian heavy off
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  Express, plus over three hundred thousand of Bakken crude south on Bridger and Belle
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  Fourche.
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  Southbound space is locked by proration, and Midwest refinery maintenance limits
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  what PADD two can absorb.
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  So uncommitted barrels can't reach the Gulf Coast premium, and the overflow goes
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  north into Clearbrook at that discount.
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  The Gulf price is real.
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  The pipe is the problem.
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  For your call.
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  Brent over a hundred and ten with W T I back under a hundred will tempt producers to
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  test spot receipts or ask for transloading.
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  Say no to spot rail barrels without a committed refinery off take,
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  because the netbacks are underwater.
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  With Express full into Casper, watch gravity and sulfur at the manifold so heavy
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  batches don't touch light sweet storage.
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  And audit nominations and bill deficiencies on unfulfilled commitments,
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  since proration is squeezing everyone uncommitted.
• 7:54
  That's the brief.