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Pipeline Bottlenecks at Guernsey and Shifting Rockies Flows · The Gathering Line

• 0:00
  Friday, October ninth.
• 0:01
  Here's what moved since Thursday's close, and what it means for Rockies and Bakken
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  flows.
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  Global first.
• 0:08
  Brent is down about one percent overnight, roughly a hundred and three dollars and
• 0:12
  thirty cents.
• 0:13
  That's off Thursday's settle of a hundred and four twenty eight,
• 0:16
  and Thursday's intraday high of a hundred and five seventeen.
• 0:20
  The trigger, per the twenty two V overnight briefing, was a statement that the
• 0:23
  United States will not strike Iran before the November midterms.
• 0:28
  Other reports say the military was told to prepare for a possible resumption,
• 0:31
  so treat this as headline relief, not a change in supply.
• 0:35
  And the offsets are live.
• 0:37
  Houthi strikes on Riyadh's King Khalid airport killed three and grounded flights.
• 0:42
  The group also claims a hit on Aramco's Rabigh refinery.
• 0:45
  That's a claim, and I haven't seen confirmed damage.
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  Treasury sanctioned seventeen shadow fleet tankers.
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  Brent has been working a ninety six to a hundred and ten range for a month,
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  and nothing overnight breaks it.
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  OPEC plus, nothing new.
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  November production baselines stand.
• 1:01
  The provisional hundred and eighty thousand barrel per day December increment is
• 1:05
  still contingent on Iraqi and Kazakh compensation cuts.
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  And the IEA talk of a hundred million barrel coordinated stock release remains
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  unformalized.
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  Discussion, not a decision.
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  North America.
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  Western Canadian Select at Hardisty is still deeply discounted,
• 1:20
  about sixteen dollars and sixty five cents under W T I, with fall turnarounds in the
• 1:25
  Midwest doing the damage.
• 1:27
  Canadian export pipes are around ninety three percent utilized,
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  which leaves roughly three hundred and fifty thousand barrels per day of headroom.
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  Enbridge's Express into Casper is fully booked at its two hundred and eighty
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  thousand barrel per day nameplate.
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  Trans Mountain is steady near sixty percent.
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  One thing to watch: winter condensate blending requirements will squeeze effective
• 1:47
  heavy takeaway as we head into November.
• 1:49
  Mexico's Maya export curtailments are unchanged.
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  United States.
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  W T I front month is around ninety dollars and sixty seven cents,
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  down from ninety two seventy two Thursday, tracking Brent lower.
• 2:02
  The Brent W T I spread widened to twelve dollars and sixty three cents from twelve
• 2:06
  forty six.
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  A double digit spread like that keeps pulling inland barrels toward Gulf Coast
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  export docks, and hold that thought for Guernsey.
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  No new E I A print since Wednesday, so the backdrop stands.
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  Commercial crude drew three point one eight six million barrels to four hundred
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  twenty four point one three million.
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  Cushing built four hundred and forty thousand to twenty four point seven million,
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  still one point eight four million under the five year seasonal average.
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  The Midwest built one point eight seven two million to a hundred and six point nine
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  eight million on turnarounds.
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  The Rockies drew a hundred and forty four thousand to twenty two point three five
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  million.
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  The Gulf Coast drew three point eight nine eight million.
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  Refinery utilization is ninety two point seven percent.
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  The Baker Hughes count comes at noon Central.
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  Last week's was four fifty six oil rigs, up one, with total rigs at five ninety
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  eight, down one.
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  Uinta Basin.
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  Yellow wax is trading at an indicative ten to fourteen dollars under W T I at the
• 3:03
  wellhead, and I'd stress indicative.
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  Gulf Coast refiners are bidding an indicative premium of about three twenty over W T
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  I for wax, for the lube and low sulfur yield.
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  Here's the problem.
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  Spot crude by rail in coiled, insulated cars runs sixteen to eighteen dollars a
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  barrel.
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  Set a three twenty premium against that freight and you're twelve eighty to fourteen
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  eighty a barrel in the hole versus selling locally.
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  So rail stays confined to term contracted baseline volumes.
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  The local cap is Salt Lake City, five refineries, about two hundred and five
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  thousand barrels per day total, and roughly eighty thousand barrels per day of
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  capacity for waxy crude.
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  The Uinta Basin Railway is still stalled after the D.C.
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  Circuit remand.
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  The Surface Transportation Board supplemental review and Forest Service right of way
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  approvals are pending.
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  The two point two to two point five billion dollar private financing is unfinalized,
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  with no construction.
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  Operators including Crescent Point, Veren, Ovintiv, Scout, XCL,
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  Uinta Wax, Berry, Caerus and SM Energy are holding steady on contracted development.
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  Bakken.
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  Output holds near one point one four million barrels per day in North Dakota,
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  with the Williston total around one point one nine to one point two million.
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  Ninety seven point four percent comes from the Bakken and Three Forks.
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  Statewide gas capture is ninety five point five percent, even with a gas to oil
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  ratio of three point zero nine M C F per barrel.
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  Long laterals, three to four miles, are sixty three percent of new completions.
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  Dakota Access is running near full, so negligible spot space south.
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  Kinder Morgan's conversion of the eighty eight thousand barrel per day Double H line
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  to N G L service keeps pulling crude capacity out of the region and pushes
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  incremental volumes toward Bridger's Belle Fourche system.
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  Steel Reef's F E R C application to export unprocessed North Dakota gas into
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  Saskatchewan is still pending.
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  Rail to coastal refineries runs ten to fifteen dollars a barrel,
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  so it's legacy firm agreements only.
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  Chord, Hess and Chevron, Devon and Grayson Mill, and ConocoPhillips report steady
• 5:11
  operations.
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  Hess Midstream is targeting at least five percent volume growth in the second half.
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  Powder River Basin.
• 5:19
  Anschutz, Continental, Devon, EOG and Peak are steady, no interruptions.
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  With Double H leaving crude service, egress leans on local gathering and the Bridger
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  and Belle Fourche interconnects into Guernsey.
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  Plains continues folding the Silver Creek Midstream assets,
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  a five hundred and eighty five million dollar acquisition, into Guernsey delivery
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  headers.
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  Now Guernsey, which is pronounced GERN zee, and the part that matters most.
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  Light sweet is firm at about eighty five cents over W T I Cushing.
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  Clearbrook trades at a discount to Guernsey of a dollar fifty to two ten.
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  Both unchanged over the last twenty four hours.
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  Those are desk indications, not published settlements.
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  The story is space, not price.
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  Pony Express, about four hundred and thirty thousand barrels per day to Cushing,
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  and Platte, a hundred and forty five thousand to Wood River and Patoka,
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  are both severely apportioned.
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  With Brent W T I at twelve sixty three pulling barrels to the Gulf Coast,
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  pipeline capacity is trading at a premium to uncommitted barrels sitting in tanks.
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  On tariffs, Bridger's recent filing provides interim capacity moving more than two
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  hundred and fifty thousand barrels per day from the Bakken into Wyoming while it
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  evaluates downstream expansions of up to two hundred thousand.
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  The Tallgrass and Bridger open season closed in early twenty twenty five,
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  and Bridger's proposed five hundred and fifty thousand barrel per day Canada to
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  Guernsey line is a long term concept, not a project.
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  So what's a Guernsey shipper choosing?
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  One, take proration on Pony or Platte and reach Gulf Coast export margins.
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  Even after volume cuts, that's the best realized netback, which is why the space is
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  contested.
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  Two, sell east into Clearbrook at that one fifty to two ten discount,
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  into a Midwest already long one point eight seven two million barrels on
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  turnarounds.
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  Three, rail at ten to fifteen dollars a barrel, which wipes out the arbitrage.
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  Rationing of pipe, not molecule pricing, is the friction to bring to your call.
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  That's the brief.
• 7:14
  Rig count at noon Central.