The Uinta Basin in northeastern Utah is on pace to produce 193 Mb/d of crude oil by YE24, according to East Daley’s latest Uinta Basin Supply & Demand Report. Increased development and new markets for the basin’s unique crude have driven double-digit annual production growth since 2021, doubling output since 2019.
Despite recent setbacks for rail infrastructure, investors in the Uinta have proved there is more than one way to skin a cat, developing new markets for the basin’s waxy crude. On average, ~93 Mb/d of Uinta crude oil was shipped by rail in 2Q24.
Operators have made steady deliveries to the Gulf Coast (PADD 3) since 2021, but in late 2023 found new buyers in the Northeast (PADD 1), Midwest (PADD 2) and Rocky Mountains (PADD 4). April ‘24 saw rail deliveries to PADD 3 hit a new high of 114 Mb/d.
The Uinta Basin produces a crude oil differentiated as a ‘yellow wax’ (38-44 API) or ‘black wax’ (30-34 API) crude. Both qualities have low sulfur, low metal and low nitrogen, making them valuable to refiners, but a high paraffin content makes Uinta crude difficult to transport. With a pour point between 105° and 120° F, the waxy crude has a consistency similar to shoe polish and must be heated to enable flow.
Aside from crude quality, the Uinta’s biggest challenge is moving barrels to markets outside the basin. Salt Lake City has five refineries that consume ~205 Mb/d. But once their demand is met, rail is the only option to reach other markets. No pipelines reach outside the basin, and trucking is difficult since the closest markets in Guernsey and DJ are 500+ miles away and require traversing two mountain ranges.
Earlier this year, the Supreme Court agreed to hear Seven County Coalition v Eagle County, CO, a case addressing a proposed Uinta rail project. In August 2023, a federal appellate court halted the Transportation Board’s permitting of the Uinta Basin Railway. The project would enable unit trains to rail up to 350 Mb/d of crude from the Uinta through western Colorado to a Denver rail hub, then on to Gulf Coast refiners. The Supreme Court has put the case on its docket for December ’24.
Four producers drive activity in the Uinta: SM Energy (SM; formerly XCL Resources), Ovintiv (OVV), Uinta Wax Operating, and Crescent Energy. These producers account for ~127 Mb/d, or ~70% of Uinta production. See the monthly Uinta Basin Supply & Demand Report for more information.– Kristy Oleszek Tickers: SM, OVV.
Dirty Little Secrets Part 2 : Take Me to the Gulf
In Part 2 of our exclusive series, East Daley dives into the Gulf Coast — where upstream production and downstream infrastructure converge, creating a volatile and opportunity-rich environment. With daily production shifts in crude, natural gas and NGLs, understanding how these commodities interact is key to uncovering hidden profit potential. Register here to join us.
New Updates to Bakken-Guernsey-DJ Crude Oil Supply & Demand Report
East Daley is excited to announce new updates for our Bakken-GSNY-DJ Crude Oil Supply & Demand report. Updated monthly, this product now features an interactive dashboard and includes our forecast for the Uinta Basin. This report uniquely visualizes crude oil supply, demand and flows in the Bakken and Rockies regions. Learn more about the Bakken-Guernsey-DJ Crude Oil Crude Oil Report.
Sign Up for the Crude Oil Edge
East Daley’s Crude Oil Edge provides weekly updates on the US crude oil market including supply and demand fundamentals, basin-level views, and analysis of market constraints and infrastructure proposals. We explore sub-basin dynamics and provide market insights on crude oil flows, production growth, and import and export characteristics. Sign up now for the Crude Oil Edge.
The Daley Note
Subscribe to The Daley Note (TDN) for midstream insights delivered daily to your inbox. The Daley Note covers news, commodity prices, security prices and EDA research likely to affect markets in the short term.
-1.png)