A combination of new-pipeline development, lower capex by producers, production shut-ins, and changing expectations for future production has significantly altered crude oil and natural gas market fundamentals in the all-important Permian Basin. Just over a year ago, Permian production was rising steadily and oil and gas pipelines out of West Texas were running at or near full capacity. Since then, nearly 2.2 MMb/d of incremental crude takeaway capacity has come online, and production dropped by about 700 Mb/d before rebounding somewhat in recent weeks. As for gas, some takeaway constraints remain, but they are limited to when pipelines are offline for maintenance, and will be alleviated when new pipelines start operating in 2021. Today, we discuss the recent downs and ups in Permian production, takeaway capacity additions, and the resulting impacts on markets and market participants.
Whirlwind – Permian Oil and Gas Growth Stalls As New Pipes Come Online, Altering Market Dynamics
