Rigs: The total US rig count decreased to 549 for the week of May 23.
Infrastructure: South Bow has secured 20-year binding commitments for its Prairie Connector project to move Canadian crude to US delivery points.
Supply & Demand: The US natural gas pipeline sample, a proxy for change in oil production, decreased 1.1% W-o-W across all liquids-focused basins for the week ending June 1.
Rigs:
The total US rig count decreased by 2 rigs to 549 for the week of May 23. Liquids-driven basins declined from 426 to 424 rigs.
- Bakken (+2): Devon Energy, SOGC LLC
- Anadarko (-2): Carmen Schmitt, Vital Energy
- Permian
- Delaware (-1): SM Energy
- Eagle Ford (-1): T-C Oil Co.
Infrastructure:
South Bow (SOBO) on Friday (May 29) announced the open season results for its Prairie Connector project, securing 20-year binding commitments from Hardisty, Alberta to US delivery points. The company also revealed several key project details, giving the market more visibility on a potential new Canadian crude egress path.
Prairie Connect would add 380 km (~236 miles) of new 36-inch pipe and use 150 km (~93 miles) of preserved 36-inch pipe, plus two existing pump stations. Based on a typical oil pipeline flow velocity of 3-10 ft/sec, a 36-inch line implies ~300-1,100 Mb/d of theoretical capacity. SOBO is targeting a final investment decision (FID) by mid-2027.
Prairie Connector would run to the US-Canada border and connect to a companion project planned by True Companies’ Bridger Pipeline. Bridger has filed with Montana regulators to build a 36-inch crude oil pipeline from Phillips County, MT to the Guernsey hub in Wyoming.
The commercial readthrough is constructive, but Prairie Connector still carries more execution risk than a competing plan by Enbridge (ENB) and Energy Transfer (ET) to move Canadian crude through the Bakken. The companies are pursuing a more brownfield strategy: ENB would reverse flow on the Bakken Pipeline and tie it into the Dakota Access Pipeline (DAPL), using spare capacity on DAPL to move Canadian barrels to the Midwest.
That approach should reduce regulatory risk vs a greenfield cross-border build, a key distinction after the Keystone XL, Northern Gateway and Energy East projects all failed following years of regulatory, political and stakeholder pressure.
Politics may be the swing factor. South Bow still needs permits, stakeholder engagement and financing before reaching FID. A supportive US and Canadian policy backdrop could help convert binding commitments into a sanctioned project. However, a political shift in either country could raise the cost of capital, extend permitting timelines or strand the project before a final decision.
Prairie Connector also doesn’t resolve the full egress problem. Bridger’s companion project would move ~550 Mb/d from the US-Canada border to Guernsey, WY, where East Daley’s Crude Hub Model shows only ~100 Mb/d of spare takeaway today. We expect Tallgrass Energy will pursue an expansion of its Pony Express system if the Bridger/Prairie Connector projects move forward. Pony already runs above its 300 Mb/d nameplate capacity out of Guernsey, averaging ~312 Mb/d in 3Q25. A Pony loop would create the commercial backbone to move heavy Canadian crude to Gulf Coast refiners.
Investor Takeaway: Watch political swings in the US and Canada as closely as SOBO’s 2Q26 disclosures, Bridger’s permitting schedule, and any Tallgrass/True commitments on Pony. Prairie Connector’s open season de-risks the Canadian leg, but politics could make or break South Bow’s ability to turn commitments into steel in the ground.
Supply & Demand:
The US natural gas pipeline sample, a proxy for change in oil production, decreased 1.1% W-o-W for the May 18 week across all liquids-focused basins.
The Gulf of America (-10.5%) and the Barnett (-7.6%) posted the largest decreases for the week, followed by the Permian (-2.4%), Anadarko (-1.7%), Arkoma (-1.5%) and Willison (-1.1%) basins. Volumes increased in the Rockies (+2.0%) and Eagle Ford (+0.7%).
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 June 1, 277 Mb/d of refining capacity is offline for maintenance. The Calcasieu refinery (144 Mb/d) and PBF Energy (105 Mb/d) have the most capacity offline, both due to non-maintenance shutdowns. ExxonMobil makes up the remaining 30 Mb/d of offline capacity due to an output reduction. All refineries are expected to run at full capacity in the second week of June.
Vessel traffic monitored by East Daley along the Gulf Coast increased W-o-W. A total of 35 vessels were loaded for the week ending May 30. East Daley expects this figure to remain strong as long as the Strait of Hormuz remains under blockade.