Rigs: The total US rig count increased to 594 for the week of Aug. 1
Infrastructure: Enbridge has postponed the second phase of its Mainline Optimization project, citing uncertainty among Canadian producers, and instead is prioritizing Mainline Optimization Phase 1.
Supply and Demand: The US natural gas pipeline sample, a proxy for change in oil production, decreased 2.0% W-o-W across all liquids-focused basins for the week ending Aug. 10.
Rigs:
The total US rig count increased to 594 for the week of Aug. 1. Liquids-driven basins decreased to 453, down 2 rigs W-o-W.
- Anadarko (+1): Freedom Operating Co
- DJ (-1): Rangeview Resources
- Permian (-2)
- Delaware (+1): Continental Resources
- Midland (-3): Ring Energy
Infrastructure:
Enbridge (ENB) has postponed the second phase of its Mainline Optimization project (MLO2), citing uncertainty among Canadian producers to commit to the expansion. The company instead is prioritizing Mainline Optimization Phase 1 (MLO1), which reached a final investment decision (FID) in November 2025 and targets a 2027 in-service date.
MLO2 was set to add 250 Mb/d of egress capacity from Edmonton, Alberta to Cromer, Manitoba, reversing Enbridge’s Line 26 and connecting to Energy Transfer’s (ET) Ramberg Terminal in North Dakota. The project would allow Canadian crude to flow directly onto the Dakota Access Pipeline (DAPL) in the Bakken. Enbridge originally planned to reach FID on Phase 2 in mid-2026, with the expansion to start in late 2028.
On ENB’s 2Q26 earnings call, executives cited price volatility in crude oil for the delay. WTI spot prices have swung between $70 and $119/bbl since the onset of the Iran war, leading to caution among producers without a more settled outlook.
A second factor is an agreement reached in July between Canada’s leading oil sands producers and the Alberta and federal governments. The memorandum of understanding lays out conditions to advance a carbon capture project, known as Pathways, to reduce emissions from oil sands development, while Canada Prime Minister Mark Carney would endorse a new 1 MMb/d export pipeline to the Pacific coast. While positive for the industry’s long-term outlook, management noted the agreement remains non-binding, and Canadian producers are reluctant to increase spending until they have more legal certainty.
Instead, Enbridge will focus on the MLO1 project. The expansion will use drag-reducing agents (DRAs) and a reconfiguration of the Mainline to add 150 Mb/d of capacity to Patoka, IL. ENB will also build pump stations on its Flanagan South Pipeline to add 100 Mb/d of capacity, creating further egress to Cushing.
East Daley’s WCSB Production Scenario Tool shows crude production growing 1.8% by 1Q28 and steadily filling remaining pipeline capacity. Canada-to-US pipelines are currently moving ~3.97 MMb/d vs 4.21 MMb/d of combined capacity, implying 94% utilization and only ~244 Mb/d of aggregate headroom. Enbridge’s Mainline (99%), Express (94%) and Plains All American’s (PAA) Rangeland/Glacier systems (100%) are the most constrained, while Keystone retains ~151 Mb/d of available capacity.
Bottom Line: MLO1 buys Enbridge time, but it doesn’t remove the need for MLO2. East Daley projects WCSB production will reach existing egress capacity by 2028 — the same year MLO2 was supposed to start up. Delaying Phase 2 will shorten the runway for producers and Enbridge to sanction the next expansion before pipelines reach saturation.
Supply and Demand:
The US natural gas pipeline sample, a proxy for change in oil production, decreased 2.0% W-o-W for the week of Aug. 10 across all liquids-focused basins.
The Williston (+0.9%) was the only basin that increased W-o-W. Volumes decreased notably in the Anadarko (-2.0%), Barnet (-11%), Permian (-4.1%) and Eagle Ford (-2.3%), with a slight decrease in the Rockies (-0.3%) and Arkoma (-0.7%). The Gulf of America remained flat W-o-W. The Rockies and the Gulf of America have a high correlation between gas volumes and crude oil volumes, whereas the Permian and Eagle Ford basins correlation is less than 45%.
As of Aug. 10, there are no reported refinery outages.
Vessel traffic monitored by East Daley along the Gulf Coast decreased W-o-W. A total of 27 vessels were loaded for the week ending August 8, a decline of 2 from the prior week.