Oil takeaway capacity from the Permian basin, the largest U.S. shale field, is expected to tighten next month due to scheduled pipeline maintenance, which is already driving up the premium for delivered WTI into East Houston.
The 642-mile Wink-to-Webster pipeline, operated by Exxon Mobil and which ships more than 1 million barrels per day (bpd) of crude and condensate from the Permian Basin to the Gulf Coast, is due downtime next month for a 10-day scheduled maintenance period.
“Of course that means crude oil supplies are supposed to back up in the Permian Basin while crude oil inventories are drawn along the Gulf Coast”, said Andrew Lipow, president of Lipow Oil Associates in Houston.
The spread between West Texas Intermediate (WTI) crude and the same grade delivered to Magellan’s East Houston terminal (MEH) hit its widest point on Monday at a $1.25 per barrel premium, the widest since early June 2021, according to LSEG data.
(Reporting by Georgina McCartney in Houston and Laila Kearney in New York; Editing by Kirsten Donovan)