Executive Summary: Rigs: The total rig count decreased by 6 for the December 22 week, down to 530 from 535. Infrastructure: As Permian Basin production grows, its no surprise that most barrels are headed to the Corpus Christi export market. Storage: East Daley expects a 2.4 MMbbl injection commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending January 3.
Rigs:
The total rig count decreased by 6 for the December 22 week, down to 530 from 535. Liquids-driven basins declined by 2 rigs W-o-W.
Infrastructure:
As Permian Basin production grows, its no surprise that most barrels are headed to the Corpus Christi export market. However, Houston is a very close second, with flows only ~300 Mb/d behind Corpus Christi. As Permian supply continues to expand, Houston deliveries will see the most growth at 28% (585 Mb/d) from YE24–YE27 in East Daley’s Crude Hub Model.
Of the ~6.2 MMb/d produced in the Permian today, 39% (2.4 MMb/d) is delivered to Corpus Christi, 34% (2.1 MMb/d) to Houston, 15% (950 Mb/d) to Nederland, and 9% (550 Mb/d) to Cushing. Houston offers the Permian barrel the most optionality of markets while also retaining a neat Permian quality designation. Production is connected to numerous export docks like Enterprise Products’ (EPD) Houton Ship Channel and Freeport docks. Permian barrels can also access Louisiana and Nederland markets from Houston, including refineries across southeastern Texas and Louisiana.
Currently, pipelines delivering to Houston are only 75% utilized. However, this is a bit deceiving. EPD’s Midland-to-Echo pipelines (M2E) and ONEOK’s Longhorn Pipeline both have utilization rates >90%. Wink-to-Webster and BridgeTex have excess capacity with utilization at ~65% and ~55% respectively.
M2E delivers the most production at ~1 MMb/d, whereas Wink-to-Webster, the next-biggest pipeline (1.05 MMb/d capacity), only delivers ~650 Mb/d. Longhorn is also highly utilized at 92% but only delivers ~220 Mb/d to market.
BridgeTex is the wildcard. Occidental’s committed volume rolled off in 2024, and East Daley does not believe BridgeTex will exceed 70% utilization until 2027, when overall Permian egress reaches 89%. BridgeTex has comparably high tariff rates, in addition to stacked rates when trying to reach markets.
In the Crude Hub Model, East Daley forecasts M2E to stay highly utilized at >92% until M2E II returns to crude service in 4Q25. Historically, Wink-to-Webster has seen the most variabiliy in flows, reaching a high in 2024 of 918 Mb/d and a low of 620 Mb/d outside of June’s 10-day outage. EDA believes Wink-to-Webster will continue to see volumes swing due to its large capacity, with utilization rates to average ~70% in 2025.
In 2027, East Daley expects Permian flows to Houston to exceed Corpus Christi deliveries. Permian egress capacity to Corpus Christi is 2.67 MMb/d, including the upcoming Gray Oak expansion, compared to 3.04 MMb/d to Houston.
Storage
East Daley expects a 2.4 MMbbl injection commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending January 3. We expect total US stocks, including the SPR, will close at 811 MMbbl.
The US natural gas pipeline sample, a proxy for change in oil production, increased 0.8% W-o-W across all liquids-focused basins. Samples increased 8.16% in the Eagle Ford Basin, 2.2% in the Permian Basin and 2.56% the Bakken. Samples decreased 3.22% in the Gulf of Mexico. The Rockies and the Gulf of Mexico have 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 at 13.575 MMb/d. According to US bill of lading data, US crude imports increased by 200 Mb/d W-o-W to 7.1 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, Argentina and Brazil.
As of January 2, there was ~200 Mb/d of refining capacity offline, including downtime for planned and unplanned maintenance. EDA expects gross crude inputs into refineries to decrease by ~232 Mb/d W-o-W, coming in at 16.6 MMb/d.
Vessel traffic monitored by EDA along the Gulf Coast increased W-o-W. There were 16 vessels loaded for the week ending December 28 and 22 the prior week. EDA expects US exports to be 3.75 MMb/d.
The SPR awarded contracts for 1.5 MMbbl to be delivered to Choctaw in January and 2.475 to be delivered to Bryan Mount in Jan–March 2025. The SPR has 394 MMbbl in storage as of December 27, 2024.
Regulatory and Tariffs:
Presented by ARBO
Tariffs:
Plains Pipeline, L.P. A new Light Sweet was added which shall contain no more than 0.20% sulfur by weight and no less than 36 degree API gravity when tendered for transportation at Carrier’s Fort Laramie Station. The rate from Fort Laramie, WY to Guernsey, WY was reduced to incentive more shipments. FERC No 144.8.0 IS25-184 (filed December 26, 2024) Effective January 1, 2025.
Bridger Pipeline LLC Provisions in Point of Origin, Destination and Facilities (Item #35), were revised regarding movements of Wyoming General Sour and the requirement for dedicated tankage to be provided by the Shipper to any destination point capable of receiving WGS. Due to the low volumes of WGS, Bridger Pipeline is no longer able to provide the dedicated tankage. FERC No 112.31.0 IS25-179 (filed Decvember 23, 2024) Effective February 1, 2025.
Gray Oak Pipeline, LLC The temporary Rate Reduction percentages (West Texas) were decreased, and the temporary volume incentive rates were increased. FERC No 2.23.0 IS25-146 (filed November 27, 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/