• 4 minutes Is The Three Gorges Dam on the Brink of Collapse?
  • 8 minutes The Coal Industry May Never Recover From The Pandemic
  • 11 minutes China Raids Bank and Investor Accounts
  • 4 hours Sources confirm Trump to sign two new Executive orders.
  • 9 hours Sometimes I Think Trump Supporters on This Forum Are Russians
  • 1 day CV19: New York 21% infection rate + 40% Existing T-Cell immunity = 61% = Herd Immunity ?
  • 13 hours No More Love: Kanye West Breaks With Trump, Claims 2020 Run Is Not A Stunt
  • 20 hours In a Nutshell...
  • 6 hours Better Days Are (Not) Coming: Fed Officials Suggest U.S. Recovery May Be Stalling
  • 1 day A Real Reality Check on "Green Hydrogen"
  • 15 hours During March, April, May the states with the highest infections/deaths were NY, NJ, Ma. . . . . Today (June) the three have the best numbers. How ? Herd immunity ?
  • 2 days Why Oil could hit $100
  • 3 hours Where is Alberta, Canada headed?
  • 2 days Why Wind is pitiful for most regions on earth
  • 11 hours Putin Paid Militants to Kill US Troops

Cushing Pipeline Suspension Gets Extended

Plains All American Pipeline, the operator of the biggest pipeline carrying crude from the Permian to Cushing, Oklahoma, said it has extended the suspension of the pipeline due to problems with pressure. The announcement was made on Thursday, the day when the pipeline was to be restarted after a 10-day stoppage for a hydrotest.

The news immediately affected the spread before the front-month futures contract for West Texas Intermediate, and the second-month contract, Reuters noted, with traders largely expecting the planned outage to cause a shortage of 2 million barrels at Cushing for last week. As a result, the front-month WTI contract’s discount to the second-month futures narrowed by 10 cents to just US$0.33. Spot prices for WTI were also affected, with the discount to the futures contract diving to US$1 a barrel from US$0.15 in the same session, before the pipeline operator made its announcement.

The November contract for WTI closed at US$50.77 a barrel on Thursday, up 0.56 percent. The spot price for the benchmark at Cushing was US$50.72 on Tuesday, the latest available figure from the EIA.

The Permian pipeline is the only outgoing one in the most productive shale play in the U.S. It has a daily capacity of 450,000 barrels of crude, and if Plans All American Pipeline does not complete the work on it until next Thursday, storage facilities along and around it could fill up. This would push spot prices further down, according to traders.

Plains All American Pipeline operates over 18,000 miles of crude oil and natural gas liquids pipelines and gathering systems and has a total storage capacity of 30 million barrels.

Earlier this week, analysts cautioned that the company faces heightened risk to its revenues from its supply and logistics operations, which contribute a fifth of overall revenues. According to the experts, this business division gets its income from the difference in purchase and resell prices of crude oil and natural gas liquids. This makes it vulnerable to fluctuations in regional supply and demand for these commodities.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News