Executive Summary: Rigs: The total rig count increased by 2 for the November 17 week, up to 564 from 562. Infrastructure: Crude flows are shifting to the Cushing storage hub in Oklahoma thanks to changing dynamics in several basins, creating more demand for northbound pipeline from the Permian Basin.
Rigs:
The total rig count increased by 2 for the November 17 week, up to 564 from 562. Liquids-driven basins declined by 2 rigs W-o-W.
- Anadarko (-1): Berexco, LLC (-1)
- Eagle Ford (+2): Escondido Resources (+1), Dahco Operating, LLC (+1)
- Permian (-4):
- Delaware (-1): EOG Resources (+1), Exxon (-2)
- Midland (--3): Exxon (-1), Diamondback Energy (-1), Chevron (-1)
- Uinta (+1): WEM Operating, LLC (+1)
Infrastructure:
Crude flows are shifting to the Cushing storage hub in Oklahoma thanks to changing dynamics in several basins, creating more demand for northbound pipeline from the Permian Basin. Plains All American (PAA) has seen an early lift from this trend, and we expect more gains ahead for assets.
East Daley’s Crude Hub Model captures the evolving dynamic at Cushing: barrels traveling through the Rockies from Guernsey, WY and the Denver-Julesburg Basin will decline, while flows increase from the Permian Basin to fill the void at Cushing.
Our Production Scenario Tools forecast growth in Bakken crude oil production, increasing from ~1.26 MMb/d in 2024 to average ~1.32 MMb/d in 2025. Despite this growth, the conversion of Kinder Morgan’s (KMI) Double H pipeline to NGL service in 1Q26 will leave True Companies' Bridger Pipeline as the sole egress route to Guernsey, limiting Bakken barrels in the market.
The loss of Bakken crude at Guernsey comes as production declines from other Rockies basins. While we see modest growth of 5 Mb/d in the Powder River Basin in 2025, this is more than offset by a fall in the DJ. We forecast DJ oil production to decrease ~60 Mb/d Y-o-Y by YE25 as lower rig counts and industry consolidation take a toll on output.
The Bakken – Guernsey – DJ S&D Report predicts barrels moving from Guernsey to the DJ Basin will drop from ~163 Mb/d in 3Q25 to ~137 Mb/d in 1Q26, while DJ-to-Cushing flows decline from ~474 Mb/d to ~433 Mb/d. With Oklahoma's ~530 Mb/d of refining capacity and Cushing’s vast ~94 MMbbl storage infrastructure, reduced supply poses challenges for meeting market demand.
To compensate, pipelines from the Permian provide alternative supply to Cushing. By 1Q26, volumes on PAA’s Basin Pipeline rise ~21 Mb/d to ~314 Mb/d in the Crude Hub Model, while Centurion Pipeline flows average ~108 Mb/d.
Storage
The storage report will be back December 11, 2024.
Regulatory and Tariffs:
Presented by ARBO
Tariffs:
Mars Pipeline Intrasystem Transfers stipulating carriers may document changes in custody of petroleum in the system have been removed from the rules and regulations. FERC No 27.11.0 IS25-88 (filed November 13, 2024) Effective January 1, 2025.
The above information is provided by ARBO’s Oil Pipeline Tariff Monitor. For more information on regulatory proceedings or tariff rates, please contact please contact Corey Brill via email at corey@goarbo.com or phone at 202-505-5296. https://www.goarbo.com/
