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Brent Jumps, but GERN-zee Faces a December Egress Squeeze · The Gathering Line

• 0:00
  Friday, October twenty third.
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  December nominations close today, and the rig count lands at noon Central.
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  Global first.
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  Brent ran again overnight.
• 0:10
  IranWire has it touching one hundred fourteen dollars, a five month high.
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  Fortune had it at one hundred sixteen dollars and three cents at seven fifteen
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  Eastern, up two dollars and eighty two cents from Thursday morning.
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  Those are two different quotes pointing the same direction,
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  so lean on the direction.
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  The reported trigger is Houthi strikes on Saudi energy facilities and an order to
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  pull Aramco staff out of Dhahran.
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  President Trump said Thursday that Iran is using fake news to push prices up before
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  the midterms.
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  That's a claim, not a supply fact.
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  Kpler and Vortexa show Iranian seaborne exports at zero in September and October,
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  and Hormuz traffic is back above where it was before the war.
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  Here's the piece that touches your book.
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  RBN has supertanker fixtures from the Gulf Coast to China above eighty million
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  dollars, and Goldman puts average crude freight near twenty dollars a barrel,
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  against three a year ago.
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  That wedge is why inland light sweet isn't capturing the waterborne Brent print.
• 1:12
  OPEC+ quotas are unchanged heading into the November first ministerial.
• 1:16
  JODI data via OilPrice has Saudi output at six point two four million barrels per
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  day in August, with exports of four point four five million held up by drawing down
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  domestic stocks, not by pumping more.
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  The U.S.
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  strategic reserve sits at two hundred eighty two point seven million barrels,
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  lowest since nineteen eighty two.
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  North America.
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  W C S for November at Hardisty is steady at twenty five dollars and fifty cents
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  under W T I.
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  Export trunklines out of Western Canada run near ninety three percent.
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  T M X is stuck near sixty percent, about four hundred twenty five thousand barrels
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  per day, because Pacific freight keeps the Asian arbitrage shut.
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  That pushes Canadian barrels toward the U.S.
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  interior.
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  Enbridge's Express is at one hundred percent, two hundred eighty thousand barrels
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  per day, into Casper and Gern zee.
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  Mexico, nothing material.
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  United States.
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  W T I broke above one hundred dollars this morning, after trading near ninety nine
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  fifty to one hundred Thursday.
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  The cash to futures spread is noisy with the December roll,
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  so treat it loosely.
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  Picking up from Wednesday's E I A report: commercial crude fell three point zero six
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  one million barrels to four hundred twelve point five one seven million,
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  against a consensus draw of one point three.
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  But the Gulf Coast, PADD three, was the entire draw, down five point oh four one
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  million on storm shut ins.
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  Inland built.
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  PADD four, the Rockies, added seven hundred eighty six thousand to twenty three
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  point four nine six million.
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  Cushing added one million to twenty seven point six, a fourth straight build.
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  Production fell four hundred ten thousand to thirteen point two seven million,
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  and runs slipped to ninety three point four percent.
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  Baker Hughes comes at noon.
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  The baseline from October sixteenth is six hundred three total rigs,
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  oil down three to four fifty nine, gas one thirty three.
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  Corporate: Devon is selling its Eagle Ford position to Crescent Energy for four
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  point two two billion in cash.
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  Antitrust reviews continue on Enbridge's two point five five billion dollar
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  Tallgrass crude deal, which includes seventy five percent of Pony Express,
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  and on Hess Midstream's roughly two hundred million dollar purchase of Chevron's D J
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  Basin gathering plus a twenty percent Saddlehorn stake.
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  Uinta Basin.
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  Yellow wax wellhead postings hold ten to fourteen dollars under Cushing.
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  Delivered Gulf Coast wax trades at W T I plus three twenty.
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  Heated railcar freight is sixteen to eighteen dollars, which gives a Gulf Coast
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  netback of eighty five fifteen to eighty seven fifteen, twelve eighty to fourteen
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  eighty under Cushing.
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  Spot rail is underwater against local refinery postings.
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  Salt Lake's five refiners are taking about eighty thousand barrels per day of waxy
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  crude, which is their ceiling before fouling.
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  Rail loadings average one hundred fifteen thousand, entirely M V C anchored,
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  and spot racks are idle.
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  Wildcat's Helper terminal keeps expanding toward one hundred thousand.
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  Energy Transfer's Price River terminal is in Utah permitting review,
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  with a decision targeted for the fourth quarter.
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  The Uinta Basin Railway has laid no track.
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  The D.C.
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  Circuit formally sent the case back to the Surface Transportation Board,
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  and the Forest Service right of way stays on hold pending the Board's updated order.
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  Operators are level.
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  Bakken.
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  Director's Cut data holds production near one point one five three million barrels
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  per day, thirty three rigs, ninety six percent gas capture,
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  about one hundred thirty million cubic feet per day flared.
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  Dakota Access is full at an effective seven hundred fifty thousand.
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  Walk up tariffs run nine seventy five a barrel against five sixteen to seven fifty
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  six committed.
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  Double H's N G L conversion permanently removes sixty five to eighty eight thousand
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  barrels per day of crude capacity, so reliance concentrates on D A P L and Bridger.
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  All in rail to the coasts is ten to fifteen dollars before car lease and rack
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  tariffs, and spot crude by rail is commercially shut.
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  Chevron trims Williston from three rigs to two by December for longer laterals,
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  and Hess Midstream sees twenty twenty seven volumes down about five percent before
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  flattening.
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  Powder River.
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  Anschutz, Continental, Devon, EOG, and Peak hold their schedules,
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  and gathering has room.
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  The squeeze is at the receipt manifolds feeding the Gern zee headers.
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  Plains is still integrating the Silver Creek system.
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  Now Gern zee, the one that matters today.
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  Desk indications are soft, so weigh them that way: Gern zee sweet at eighty five
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  cents over Cushing, roughly one hundred dollars and eighty five cents outright,
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  flat over the last twenty four hours.
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  Same level as Thursday's indication.
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  Clearbrook sits one fifty to two ten under Gern zee, meaning sixty five cents to a
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  dollar twenty five under Cushing.
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  Look at the balance.
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  Receipts are heavy.
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  Express puts two hundred eighty thousand barrels per day of Canadian crude into
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  Casper and Gern zee, and Bridger and Belle Fourche feed in more than three hundred
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  thousand of Bakken.
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  Egress is the problem.
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  The desk has Pony Express running roughly two hundred thirty thousand barrels per
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  day against a four hundred thirty thousand nameplate, blamed on downstream
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  allocation and refinery constraints.
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  I can't confirm that number, and East Daley had Pony above its nameplate in the
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  third quarter of last year, so verify it with your own scheduler.
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  Platte, one hundred forty five thousand eastbound to Wood River and Patoka,
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  is under heavy proration.
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  Saddlehorn and Grand Mesa are full of D J barrels headed for Cushing.
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  The long game stays in view.
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  Bridger has filed in Montana for a five hundred fifty thousand barrel per day,
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  thirty six inch line, six hundred forty five miles from Phillips County to Gern zee,
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  targeting a July twenty twenty seven start.
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  East Daley's read, from March, is that the hub can't absorb that without downstream
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  capacity, most likely looping Pony.
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  The Bridger and Tallgrass open season is about securing that commercial backing.
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  Now today's cutoff.
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  With secondary allocation cuts, uncommitted shippers may not get space for December.
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  The choice is simple: put barrels in local tanks, or pay M V C deficiency charges.
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  Three things before close.
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  First, audit your nomination confirmations before you take any spot receipts.
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  Don't accept a barrel you can't schedule out.
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  Second, enforce deficiency billing on shippers who miss commitments,
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  because that's what protects your throughput economics.
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  Third, verify batch segregation at the headers.
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  Heavy Canadian crude arriving by Express into Casper and Gern zee raises real
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  contamination risk, A P I gravity and sulfur, for sweet batches.
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  One off spec rejection at a refinery costs more than the whole differential move
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  this week.
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  That's the brief.
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  Check the rig count at noon, and confirm your nominations before the bell.