Oil produced in North Dakota’s Williston Basin is the latest North American crude grade to experience plummeting values because of what many in the industry say is rising output and tightening pipeline takeaway capacity combined with regional refinery maintenance. Bakken crude values began experiencing a rather sharp decline at the start of October when a combination of factors began to weigh on values. Midcontinent crude traders have spoken about Bakken differentials being pressured by pipeline-constrained Canadian grades, as well as ongoing refinery maintenance in the Midwest. More than 800,000 b/d of Midwestern refining capacity was offline in October, but planned work started to wrap up at the end of the month. But one of the region’s largest refineries — BP in Whiting, Indiana — extended its maintenance to mid- to late November. There also were reported issues at Phillips 66 at the Wood River refinery in Roxana, Illinois, recently after the coker and crude sections were shut. Bakken grades have dropped sharply since the beginning of October when a combination of factors began to weigh on values. Prices for Bakken at terminals near the oil producing Williston Basin decreased nearly 70% from September to October, according to S&P Global Platts data.… continue reading
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Source: CTRM Center