Executive Summary: Rigs: The total rig count increased by 6 for the January 12 week, up to 526 from 520. Liquids-driven basins increased by 3 rigs W-o-W. Infrastructure: President Trump lost no time enacting his ‘Day-One’ executive orders since taking office. Storage: East Daley expects a 2,800 Mbbl injection into commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending January 24.
Rigs:
The total rig count increased by 6 for the January 12 week, up to 526 from 520. Liquids-driven basins increased by 3 rigs W-o-W.
- Permian (-2):
- Delaware (-4): Continental Resources, Devon Energy, Mewbourne Oil, EOG Resources
- Midland (+3): Burleson Petroleum, Civitas, Continental Resources
- Bakken (-1): Murex Petroleum
- Eagle Ford (+1): Texas American Resources
- Anadarko (+4): Aztec Oil Operating, Briscoe Petroleum, Elevate Energy, Mewbourne Oil
- Uinta (+2): Rose Petroleum, Ovintiv
Infrastructure:
President Trump lost no time enacting his ‘Day-One’ executive orders since taking office. Declaring a ‘National Energy Emergency’ may be the most impactful of these. President Trump believes this will allow him to remove environmental restrictions on oil and gas projects and streamline permitting for new energy infrastructure to grow fossil fuel production.
Investors in crude oil infrastructure could be some of biggest beneficiaries of this initiative. Four offshore oil terminal projects have filed for a Deep Water Port license from the US Maritime Administration (MARAD). Only one, Enterprise Products’ (EPD) Sea Port Offshore Terminal, has received the coveted deepwater license, and EPD spent five years, and a big budget, to gain this permit. Meanwhile, Energy Transfer’s (ET) Blue Marlin Offshore Port, Sentinel Midstream’s Texas Gulf Link, and Phillips 66 and Trafigura’s Blue Water projects are waiting on approval.
Having one or more of these projects reach a final investment decision (FID) would pave the way for more crude oil infrastructure and further supply growth. East Daley had projected robust US crude oil production growth prior to President Trump taking office, forecasting 500 Mb/d of growth and ending 2025 at 13.65 MMb/d. The robust growth in 2025 comes from the Permian Basin, accounting for 82% (420 Mb/d). However, as egress tightens out of the Permian and congestion increases on pipelines to export docks, price spreads will widen and price volatility will increase, leading to a bumpy ride during 2025.
Getting to FID would set other projects and strategies in motion to further expand production. Additional infrastructure will be needed to move more barrels to the Gulf Coast, and one or more deepwater projects will provide efficient access for crude oil to reach international demand.
East Daley believes the Permian Basin will be the overall winner in this new environment, spurring additional growth. However, we are not discounting potential gains from other basins, including the Bakken and Eagle Ford. The offshore Gulf of Mexico will also be a big beneficiary of eased regulations and faster permitting, but results will take time on these long-lead projects (5+ years).
The wild card, of course, is global demand. Will the global market demand additional US barrels, or will growth lead to oversupply and a response from OPEC, and risk of lower crude oil prices?
Storage
East Daley expects a 2,800 Mbbl injection into commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending January 24. We expect total US stocks, including the SPR, will close at 809 MMbbl.
The US natural gas pipeline sample, a proxy for change in oil production, decreased 2.43% W-o-W across all liquids-focused basins. Samples decreased 9.78% in the Gulf of Mexico, 4.33% in the Williston Basin, 2.69% in the Eagle Ford, and 1.83% in the Permian Basin. 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 be 13.250 MMb/d due to last week’s winter storm. According to US bill of lading data, US crude imports decreased by 345 Mb/d W-o-W to 6.4 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 Venezuela.
As of January 24, there was ~945 Mb/d of refining capacity offline, including downtime for planned and unplanned maintenance. EDA expects gross crude inputs into refineries to decrease by ~120 Mb/d W-o-W, coming in at 15.4 MMb/d.
Vessel traffic monitored by EDA along the Gulf Coast decreased W-o-W. There were 25 vessels loaded for the week ending January 25 and 26 the prior week. EDA expects US exports to be 3.9 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 Jan – March 2025. The SPR has 394.6 MMbbl in storage as of January 17, 2025.
Regulatory and Tariffs:
Presented by ARBO
Tariffs:
EPIC Crude Pipeline, LP Transportation rates and associated fees have been increased in accordance with the revised index ceiling levels. FERC No 2.27.0 IS25-00201 (filed January 22, 2025) Effective February 1, 2025.
Gray Oak Pipeline LLC The Wink, Winkler County, TX to Crane, Crane County, TX tariff uncommitted rate has been discounted. FERC No 2.24.0 IS25-00204 (filed January 24, 2025) Effective March 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/
