The Great Cryptocurrency Conspiracy of 2018....The truth, the whole truth, and nothing but the truth about cryptocurrencies—and how Wall Street and Washington are covering it up....Register Here for this FREE Event

Wednesday, April 18, 2012

Williston Basin Crude Oil Production and Takeaway Capacity are Increasing

Crude oil production from the Williston Basin (primarily the Bakken formation) recently increased to more than 600 thousand barrels per day (bbl/d), according to Bentek Energy, LLC (Bentek), testing the ability of the transportation system, oil pipelines, truck deliveries, and rail to move crude oil out of the area (see chart below). The current price gap between Bakken crude oil and West Texas Intermediate (WTI) shows the effects of this constraint. Bentek projects more transportation capacity coming online in 2012, potentially alleviating this constraint.

graph of Williston Basin crude oil production and takeaway capacity, as described in the article text

 Due to pipeline capacity constraints, Williston Basin producers rely on rail and trucks to move additional crude oil out of the region. Because of these transportation constraints, Bakken crude oil currently sells at a discount of $7.50 per barrel to WTI. This discount was as much as $28 per barrel in February 2012 and is expected to continue as long as transportation constraints persist.

Currently, North Dakota has only one refinery, which processes about 58 thousand bbl/d of crude oil. Crude oil is delivered to other markets using a combination of pipeline, rail, and truck. Delivery capability as of April 2012 was: 450 thousand bbl/d by oil pipeline; 150 thousand bbl/d by rail; and small volumes by truck. However, in 2012, incremental additions to rail and oil pipeline capacity for the Williston Basin could total 350 thousand bbl/d.

Which Bakken picks should you trade? Here is a preview of our MarketClub Trade Triangle Chart Analysis and Smart Scan technology that will help you get in and out of those trades.

1 comment:

Bakken Oil said...

Pretty impressive growth, and no end in sight. ND should pass Alaska and take second place for oil production by state later this year, and maybe hit a million bpd within a few years.