Executive Summary: Rigs: The total rig count decreased by 9 for the October 13 week, down to 560 from 569. Infrastructure: Located in southwestern Wyoming, the small town of Guernsey (population ~1,500) is a key crude oil market hub in the Rocky Mountain region. Storage: East Daley expects a 350 Mbbl injection in commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending October 25.
Rigs:
The total rig count decreased by 9 for the October 13 week, down to 560 from 569. Liquids-driven basins declined by 9 rigs W-o-W.
Infrastructure:
Located in southwestern Wyoming, the small town of Guernsey (population ~1,500) is a key crude oil market hub in the Rocky Mountain region. The strategic location connects multiple grades of crude oil, including heavy sour varieties like Western Canadian Select (WCS), WY General Sour from the Powder River Basin, and WY Asphalt Sour from the Big Horn Basin. The Guernsey market also includes sweet grades such as Syncrude from the Western Canadian Sedimentary Basin (WCSB), Light Sweet Bakken, and Light Sweet Guernsey.
Nearby Casper, WY is another significant point in the regional crude network, as it serves as the confluence of sour crude streams. Enbridge’s (ENB) Express Pipeline transports WCS and Syncrude, while the Red Butte Pipeline carries WY Asphalt Sour and the Powder River’s WY General Sour to Casper. Light Sweet Bakken barrels reach the Guernsey market via Kinder Morgan’s (KMI) Double H and True Companies' Bridger/Belle Fourche pipelines.
Salt Lake City, UT is a major market for Guernsey crude. The city is home to five refineries: Chevron (55 Mb/d), Marathon (66 Mb/d), Big West (35 Mb/d), HF Sinclair (45 Mb/d), and Silver Eagle (15 Mb/d). These refineries are supplied from Guernsey by the SLC Core and Frontier Aspen pipelines, as well as local production from the Piceance and Uinta basins. Additionally, HF Sinclair operates a dedicated pipeline (75 Mb/d capacity) from Casper to its Sinclair refinery.
Guernsey is a key supply source for other markets. The Suncor Pipeline transports crude to the Commerce City refinery in Colorado, and the Platte Pipeline moves crude from Guernsey to CHS’s McPherson and HF Sinclair’s El Dorado refineries in Kansas, then on to the Wood River market. After meeting refinery demand, additional barrels from the Guernsey market are directed through the Denver-Julesburg Basin to Cushing.
Storage:
East Daley expects a 350 Mbbl injection in commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending October 25. We expect total US stocks, including the SPR, will close at 813 MMbbl.
The US natural gas pipeline sample, a proxy for change in oil production, decreased .62% W-o-W across all liquids-focused basins. Samples increased 3.36% in the Bakken showing signs production is returning after the early October North Dakota fires. Volume in the Permian Basin decreased 5.32% and 3.63% in the Eagle Ford Basin. The Bakken has a high correlation between gas volumes and crude oil volumes, whereas the Permian and Eagle Ford basins correlation is less than 45%.
We expect US crude production to remain flat at 13.5 MMb/d. According to US bill of lading data, US crude imports increased by 370 Mb/d W-o-W to 6.8 MMb/d. More than 60% of the supply originated from Canadian pipelines and vessels into the US, with the remainder largely coming from vessels carrying crude from Mexico, Venezuela and Argentina.
As of October 25, there was ~1012 Mb/d of refining capacity offline, including downtime for planned and unplanned maintenance. EDA expects gross crude inputs into refineries to increase by ~70 Mb/d W-o-W, coming in at 16.15 MMb/d.
Vessel traffic monitored by EDA along the Gulf Coast increased W-o-W. There were 27 vessels loaded for the week ending October 25 and 26 the prior week. EDA expects US exports to be 4.5 MMb/d.
The SPR awarded contracts for 4.85 MMbbl to be delivered in October 2024. The SPR has 384.6 MMbbl in storage as of October 18, 2024.
Regulatory and Tariffs:
Presented by ARBO
Tariffs:
Grand Mesa Pipeline, LLC The rates applicable to the 2023 Open Season Committed Interruptible Rates and Incremental Interruptible rates have been decreased. FERC No 2.11.0 IS25-32 (filed Oct 1, 2024) Effective October 1, 2024.
Seaway Crue Pipeline Company LLC. The temporary volume incentive rate was extended through November 30, 2024. FERC No 2.90.0 IS25-18 (filed Oct 7, 2024) Effective November 1, 2024.
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/