Pipeline constraints to continue in the Permian…

From the Houston Chronicle, here, quoting Scott Sheffield, CEO of Pioneer Natural Resources:

“”We will reach capacity in the next 3 to 4 months,” Scott Sheffield, the chairman of Pioneer Natural Resources Co. said in an interview at an OPEC conference in Vienna. “Some companies will have to shut in production, some companies will move rigs away, and some companies will be able to continue growing because they have firm transportation.””

More from Sheffield:

”The Permian is growing at 800,0000 barrels a day annually and production currently stands at 3.3 million barrels a day, said Sheffield, who first drilled wells in the region in 1979 and is considered one of the architects of the shale revolution. Total pipeline capacity is 3.6 million barrels, so the region will reach capacity in the next three to four months and the bottleneck isn’t likely to ease for at least a year, he added.”

And, this:

”The lack of pipeline capacity will continue to cause severe dislocation in U.S. oil markets, Sheffield said. Benchmark West Texas Intermediate crude at Midland in the Permian is likely to trade at a $25-a-barrel discount to price at the industry’s hub in Cushing, Oklahoma, he said.”