- Crude oil from the booming Permian Basin is going for less than $60/bbl because production is overwhelming pipelines that connect the area to markets along the Texas Gulf Coast and abroad, according to a WSJ analysis.
- Such logjams could threaten the profits of Permian producers and slow crude production when the global oil market already faces limited supplies because of disruptions from Iran and Venezuela, which would push rising oil prices even higher.
- It could be a year or more before new pipelines from the Permian catch up with surging production; at current growth rates, PLG Consulting forecasts as much as 200M barrels of oil will be unable to make it to market in the next 16 months.
- “If you’re a producer who does not have any firm space at all, you’re going to eat the majority of that $13-$16” price differential vs. the WTI benchmark, says RBN Energy analyst John Zanner.
- Among many relevant tickers, EOG, PXD, LPI, FANG, SN, COG, CRZO, CXO, RSPP, DVN, NFX, OXY, CVX, XOM, NBL, PAA, MMP, TRGP, KMI, APC, APA, WPX, CDEV, REN, EGN, JAG, AXAS, HK, MCF, XEC, PE, SM, MTDR, QEP, AR
- Now read: Jagged Peak Energy 2018 Q1 - Results - Earnings Call Slides
Original article