Bottlenecks Stymie Crude Output Surge
- Growing Permian, Canadian crude production hits pipeline limit
- Investors not appreciating impact of tight capacity as yet
Photographer: Brittany Sowacke/Bloomberg
North America’s great oil surge of 2018 amid the highest oil prices in more than three years is threatened by pipeline gridlock from West Texas to Alberta and oil investors have yet to fully appreciate the implications, according to Energy Aspects Ltd.
North America will contribute about 1.2 million barrels a day of production growth to the world market this year, just enough to fulfill world demand, Dominic Haywood, an analyst, at Energy Aspects said in an interview at the Argus Canada crude summit. But that forecast is 100,000 barrels a day lower than what was previously estimated and there are high chances that it could be reduced further, which means even higher world crude prices later in the year, he said.