North Dakota Active Rigs Hold At 61 -- June 8, 2018

Doubling down: the press has to love this president. Just when they thought they had the theme for the G7 meeting ("G6 + Trump), the president proposes a new theme: let Russia back in. LOL.

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Back to the Bakken

Active rigs:

	6/8/2018	06/08/2017	06/08/2016	06/08/2015	06/08/2014
Active Rigs	61	52	26	82	194

RBN Energy: Midland sourr crude -- all your weight, it brings Maya down.

The Permian Basin is awash in light, sweet crude oil that’s cheap to produce and easy to process. It’s so awash, in fact, that supplies are overwhelming takeaway pipeline capacity. The resulting bottleneck in West Texas has cratered prices in Midland, where West Texas Intermediate (WTI) — the region’s light, sweet benchmark — has blown out price-wise against the same grade in other locations, including Houston, with its crude-export docks.

Less well known, but influential beyond its geography, is Midland West Texas Sour, or WTS. WTS is suffering from the same wide differentials as WTI at Midland, and those yawning spreads are dragging down the price of Maya, Pemex’s flagship heavy, sour crude.

Today, we discuss some surprising ripple effects of takeaway constraints out of the Permian. As crude output in the wildly prolific Permian rocketed past 3 MMb/d — and beyond the region’s pipeline takeaway capacity — a day of reckoning came for the price of oil in West Texas. We talked about the precarious pricing for WTI at Midland which noted the relationship between pipeline constraints and the teetering value in West Texas. Midstream companies are racing to build the pipelines needed. We showed how increasingly desperate shippers are pondering the feasibility of long-haul trucking or revived crude-by-rail to mitigate the takeaway crisis. The market is like quicksand for price differentials now, as supply keeps growing and additional pipeline capacity — while under development — isn’t coming online soon enough.