Permian Producers Get No Relief as BridgeTex Start Seen Slow Producers in the largest U.S. oil field got little relief from a pipeline startup as bottlenecks in West Texas make it difficult to transport surging crude production to market. West Texas Intermediate crude in Midland, Texas, weakened by 75 cents relative to the same grade in Cushing, Oklahoma, to a discount of $8 a barrel at 1:55 p.m., according to data compiled by Bloomberg. Midland is the pricing point for the Permian Basin, which produces 1.76 million barrels of oil a day, Energy Information Administration data show Magellan Midstream Partners LP (MMP) and Occidental Petroleum Corp. (OXY) started delivering crude today to Houston from Colorado City, Texas. The pipeline wasn’t able to alleviate prices because of a lack of capacity remaining between Midland and Colorado City, about 80 miles apart. Plains All American Pipeline LP (PAA) plans to start the Sunrise pipeline between the two cities by Jan. 1. “The real bottleneck is within the Permian itself,” said John Auers, executive vice president at energy consulting firm Turner Mason & Co. “When Sunrise gets completed, then I think that will be resolved and we’ll see the Midland-to-Cushing spread return to normal levels.” Plains Pipeline Midland crude has averaged an $8.14-a-barrel [...] newsintx/permian-producers-get-no-relief-as-bridgetex-start-seen-slow/
Posted on: Tue, 30 Sep 2014 09:31:36 +0000
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