Stubbornly high inventories at the Cushing, Oklahoma, .... are a ticking time bomb that could blow out the spread between WTI and Brent futures.
[The October spread] has jumped more than $3 a barrel since early July to hit $14 a barrel,....
Similarly the gap between the January 2013 contracts is only $12 a barrel, .....This is a great article; read the rest at the link at Reuters.
With only seven weeks remaining in the summer peak refinery operations season, there is precious little time for the industry to pare back the overhang at Cushing before refinery turnaround season is upon the market.
Indeed, the dismal showing this summer at Cushing, where stocks have built since the start of May, portends a surge in inventories to a fresh record in the fall.
"... portends a surge in inventories to a fresh record in the fall."
Two comments:
a) That's why rail is so important for the Bakken;Okay, three comments.
b) That's why Enbridge pipelines to the east are so important; and,
c) if "we" know it, certainly the operators know it, and maybe that's why there is a slowdown in oil activity in the Bakken -- if indeed there is a slowdown. The jury is still out on that, but we are down to 208 active rigs in North Dakota, down another 1 from yesterday, and down from the record high of 218.
As invertors push stocks down demanding them to meet or exceed projections a production phase s begining.Watching the permits saturation drilling is becoming the norm. Most of these operators were still trying to cover fringe acreage. Production will rise too fast for takeaway creating another problem.
ReplyDeleteYou are exactly right: takeaway is going to continue being a problem.
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