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Russia Policy Reverses the Screen; GERN-zee Barrels Push North · The Gathering Line

• 0:00
  Monday, October nineteenth.
• 0:02
  Here's what moved since Friday morning.
• 0:04
  First, a loose end from Sunday.
• 0:07
  Baker Hughes has the October sixteenth rig count posted: six hundred and three total
• 0:12
  U S rigs, unchanged on the week and fifty five above a year ago.
• 0:17
  Oil rigs at four sixty two, gas rigs at one thirty two.
• 0:21
  Canada dropped five to two seventeen.
• 0:25
  So the number I flagged as unconfirmed is now confirmed, and it's flat.
• 0:30
  Now the screen.
• 0:31
  Friday, Brent settled at a hundred and nine dollars and eighty six cents,
• 0:35
  the highest close since May nineteenth.
• 0:38
  W T I settled at a hundred and one forty one, its first close above a hundred since
• 0:43
  September seventeenth, and up ten point four one percent on the week.
• 0:47
  Sunday I said triple digit W T I was a headline screen, not a physical bid.
• 0:53
  Monday backed that up.
• 0:54
  Early Asian trade, Brent was down one point four percent at a hundred and eight
• 0:59
  thirty five, per Investing dot com.
• 1:01
  Vantage has W T I at ninety eight sixty one, back under a hundred.
• 1:06
  The driver was Washington.
• 1:08
  Late Friday, the President signed an order waiving new Russia sanctions and tariffs
• 1:13
  on major buyers of Russian oil and gas, the ones due under the Graham Act.
• 1:17
  Secretary of State Rubio said the administration wants time to assess the economic
• 1:22
  impact.
• 1:23
  Zelenskyy called it wrong.
• 1:25
  Markets priced the supply that could come back ahead of the risk that might not.
• 1:29
  On risk: Saturday, Iran's Revolutionary Guards Navy said two tankers hit mines in
• 1:36
  the Strait of Hormuz, per IRNA as carried by Reuters.
• 1:40
  No independent confirmation.
• 1:41
  Treat it as a claim.
• 1:43
  Friday, a ballistic missile aimed at Yanbu was intercepted,
• 1:47
  with early reports of no damage.
• 1:49
  Yanbu matters because it exports Saudi crude without crossing Hormuz.
• 1:54
  Ukraine also knocked a primary crude unit offline at Russia's Ryazan refinery.
• 2:00
  On the supply side, the I E A has agreed to release more than twenty million barrels
• 2:04
  of fuel, and OPEC plus holds November output, with a ministerial on November first.
• 2:10
  One caution on the paper.
• 2:12
  Dated Brent is still assessed near a hundred and thirty four,
• 2:16
  and Gulf tanker freight is around a million three hundred thousand dollars a day,
• 2:21
  roughly thirty three dollars a barrel on a Persian Gulf voyage,
• 2:24
  per Poten data reported by Gulf News and OilPrice.
• 2:28
  Waterborne is carrying a toll that inland crude doesn't.
• 2:31
  North America.
• 2:33
  Western Canadian Select for November closed Friday at twenty five fifty to twenty
• 2:37
  five fifty five under W T I at Hardisty.
• 2:40
  Trans Mountain is capped near sixty percent, about four hundred and twenty five
• 2:44
  thousand barrels per day, because Westridge freight keeps trans Pacific economics
• 2:48
  tight.
• 2:49
  Canadian export pipes run near ninety three percent full.
• 2:53
  What matters to us: Enbridge's Express is flowing at a hundred percent,
• 2:57
  two hundred and eighty thousand barrels per day into Casper,
• 3:00
  putting discounted heavy barrels straight into the Rockies corridor.
• 3:03
  Mexico, nothing material.
• 3:06
  United States.
• 3:07
  No new E I A print since Friday, but the last one sets up Wednesday's.
• 3:12
  For the week ending October ninth, commercial crude fell eight point five five seven
• 3:16
  million barrels to four fifteen point five seven seven million,
• 3:20
  against a Reuters consensus draw of just two hundred and eighty eight thousand.
• 3:24
  All of it was Gulf Coast, down nine point two three nine million,
• 3:28
  with roughly five hundred thousand barrels per day of Hurricane Isaias shut ins and
• 3:32
  export loadings.
• 3:34
  The Rockies, PADD four, actually built three hundred and fifty eight thousand
• 3:38
  barrels to twenty two point seven one zero million.
• 3:41
  PADD two added twenty three thousand to a hundred and seven million,
• 3:45
  with refinery utilization at ninety two point seven percent.
• 3:48
  Cushing sits at twenty four point seven million.
• 3:51
  So the national draw is a Gulf story, not a Rockies one.
• 3:55
  Two more.
• 3:56
  The Department of Energy is seeking proposals to exchange up to seventeen million
• 4:00
  barrels of S P R crude for November and December delivery.
• 4:04
  Energy Aspects puts the reserve near two hundred and eighty three million barrels,
• 4:07
  the lowest since October of nineteen eighty two.
• 4:10
  That barrel lands on the coast and takes pull off inland rail.
• 4:14
  And on deals, Enbridge's two point five five billion dollar Tallgrass crude
• 4:18
  purchase, which includes Pony Express, and Hess Midstream's two hundred million
• 4:22
  dollar buy of Chevron's D J gathering system, with its twenty percent Saddlehorn
• 4:26
  stake, are both still pending.
• 4:29
  Uinta Basin.
• 4:30
  Yellow wax wellhead postings are steady at ten to fourteen dollars under Cushing.
• 4:36
  Delivered Gulf Coast is indicated at W T I plus three twenty,
• 4:40
  call it a hundred and one eighty on the sub hundred screen.
• 4:44
  Coiled, insulated railcar freight to the Gulf runs sixteen to eighteen dollars a
• 4:49
  barrel, which leaves a basin netback of eighty three eighty to eighty five eighty,
• 4:54
  twelve eighty to fourteen eighty under Cushing.
• 4:56
  That doesn't clear postings, so spot rail stays shut.
• 5:00
  Loadings are about a hundred and fifteen thousand barrels per day,
• 5:03
  all under legacy minimum volume commitments.
• 5:06
  The five Salt Lake refiners are still capped at eighty thousand barrels per day of
• 5:11
  waxy.
• 5:12
  Energy Transfer's Price River terminal is waiting on final Utah air quality permits,
• 5:18
  targeting late fourth quarter.
• 5:20
  Wildcat's Helper terminal keeps expanding toward a hundred thousand.
• 5:24
  The Uinta Basin Railway has laid zero track, still tied up in the S T B remand,
• 5:29
  Forest Service right of way reviews, and Seven County bond structuring.
• 5:34
  Operators, Veren, Ovintiv, Scout, XCL, Uinta Wax, Berry, Caerus,
• 5:41
  SM, are holding steady completions and not putting new barrels on unhedged spot
• 5:46
  rail.
• 5:47
  Bakken.
• 5:48
  Latest Director's Cut: one point one five three million barrels per day,
• 5:53
  thirty three rigs, gas capture at ninety six percent, flaring near a hundred and
• 5:58
  thirty million cubic feet per day.
• 6:01
  DAPL is full at seven hundred and fifty thousand barrels per day,
• 6:04
  committed tariffs five sixteen to seven fifty six, walk up at nine seventy five.
• 6:10
  Rail to the East Coast or Pacific Northwest costs ten to fifteen dollars all in.
• 6:15
  It was out of the money even at Friday's eight forty five Brent W T I spread,
• 6:20
  and Monday's wider spread, near eleven dollars on CFD indications,
• 6:24
  gives no relief.
• 6:26
  Rail is commitments only.
• 6:28
  Chevron goes from three Williston rigs to two by December, focusing on three mile
• 6:33
  laterals.
• 6:34
  Hess Midstream models gathering throughput down five percent in twenty twenty seven
• 6:39
  before flattening.
• 6:40
  Chord, Continental, Devon with Grayson Mill, and Conoco hold flat schedules.
• 6:45
  And the Double H conversion, now Hiland Express, took sixty five thousand barrels
• 6:50
  per day of crude off that southern path.
• 6:53
  Plainview's October fifteenth analysis expects it to split across DAPL,
• 6:57
  Enbridge's Bakken system, and Bridger, which tightens aggregation locally.
• 7:02
  Powder River.
• 7:04
  Anschutz, Continental, Devon, EOG, and Peak are drilling steadily.
• 7:10
  Gathering has room.
• 7:12
  The constraint is downstream at GERN zee.
• 7:15
  Plains is still integrating its five hundred and eighty five million dollar Silver
• 7:19
  Creek gathering purchase.
• 7:21
  Now GERN zee, the one that matters.
• 7:23
  Sweet is steady at about eighty five cents over Cushing, near ninety nine forty six
• 7:28
  outright.
• 7:29
  Clearbrook is a dollar fifty to two ten under GERN zee, sixty five cents to a dollar
• 7:34
  twenty five under Cushing.
• 7:37
  That eighty five cents is misleading for uncommitted barrels,
• 7:41
  because the exits are apportioned.
• 7:43
  Pony Express is moving roughly two hundred and thirty thousand barrels per day
• 7:47
  against four hundred and thirty thousand of system capacity,
• 7:50
  under severe apportionment.
• 7:52
  The Tallgrass and Bridger open season offered incentive commitments,
• 7:56
  but no new steel.
• 7:58
  Platte, a hundred and forty five thousand, is heavily prorated toward Wood River and
• 8:02
  Patoka.
• 8:04
  Saddlehorn and Grand Mesa are saturated with D J crude headed to Cushing.
• 8:08
  Inflows stay high: two hundred and eighty thousand from Express,
• 8:12
  and over three hundred thousand of Bakken barrels south on Bridger and Belle
• 8:16
  Fourche.
• 8:17
  With Midcontinent turnarounds backing up storage, surplus is pushing north toward
• 8:21
  Clearbrook, not south.
• 8:24
  Producers will shop spot barrels off Friday's hundred dollar screen.
• 8:28
  Don't take them without verified downstream delivery tickets.
• 8:31
  Enforce your minimum volume commitments, and watch tankage and manifold blending so
• 8:36
  you don't contaminate a line.
• 8:38
  That's the brief.
• 8:39
  Wednesday's E I A is next.