Basis risk in the Permian… WSJ – Commodity Research Group

May 10, 2018 by Jim Colburn Leave a Comment

The price to oil producers in the Permian has collapsed compared to WTI… Here is Alison Sider and Ryan Dezember of the Wall Street Journal:

”In the epicenter of America’s drilling boom, crude is going for less than $60 a barrel because oil output there has overwhelmed pipelines that connect the Texas desert to markets along the Gulf Coast and abroad.

U.S. oil prices are splintering because of bottlenecks in the region due to crowded pipelines and worker shortages. Analysts and investors worry such logjams will threaten the profits of Permian producers and slow crude output when the global oil market is already facing limited supplies because of disruptions from Iran and Venezuela. That would propel rising oil prices even higher.”

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

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