The Permian Basin's Demand For Crude Oil Tanker Trucks Could Quadruple In Q2
The Permian Basin's daily requirements for tanker trucks to take crude out of the oilfield could quadruple in the second quarter of this year, Rystad Energy warned in its January newsletter. Rystad Energy, based in Oslo with its U.S. office in Houston, is a leading independent energy research and business intelligence firm that aggregates and publishes all manner of data on the oil and gas industry.
The slide in West Texas Intermediate (WTI) crude prices—down 31% since October 3—have caused oilfield operators to guide down expected activity in 2019, which Rystad believes will slow down pipeline construction. That means that not only will the bottleneck on pipeline takeaway capacity not be relieved, but it will be exacerbated.
"We do however see risk of widening differentials in Q2 2019 as long-haul trucking demand rises from current levels of ~100,000 bpd to about 350,000-400,000 bpd," Rystad wrote.
In the graph above, trucking need on a 1,000 barrel/day basis is represented by the dotted region on the left side of the image. The need for tanker truck capacity is expected to grow through the first quarter of this year before easing slightly during the second quarter and tailing off completely by the beginning of the fourth quarter.
Some back-of-the-envelope calculations can help us estimate how many tanker trucks full of crude oil that figure implies. A tanker truck can hold about 8,000 gallons of crude oil, and since one barrel of crude oil is the equivalent of 42 gallons, that ....