Rockies Crude Brief: Guernsey Bottlenecks and PADD 4 Builds

Marcus Hayes

Morning. Here's what moved, with a Rockies and Bakken lens.

Marcus Hayes

Global first. Brent futures are trading around one hundred thirteen dollars and eighty four cents a barrel, easing about one point seven percent over recent sessions. Diplomatic chatter and stock releases are giving the paper market some relief. The physical risk hasn't gone anywhere, though. Houthi attacks and regional transit disruptions keep a wide international premium over inland barrels. I have no new OPEC Plus decision and no IEA or OPEC monthly report in this window, so nothing to add there.

Marcus Hayes

North America. Canadian heavy keeps moving south, through Enbridge's Express line into Casper and Gernzee, rated at two hundred eighty thousand barrels per day, and through the Mainline. W C S differentials remain at a discount, and I don't have a confirmed print for you today. The direction is steady, and the driver is strong upstream Canadian output competing with Bakken and Rockies barrels at the northern corridor terminals. That limits your northern egress options. Nothing material on Mexico.

Marcus Hayes

United States, and the E I A report leads. The Weekly Petroleum Status Report for the week ending October twenty third came out this morning. Commercial crude, excluding the SPR, drew one point eight nine two million barrels to four hundred ten point six two five million, from four hundred twelve point five one seven million the week before. The draw was larger than the consensus, which my notes put near flat, around zero. I can't confirm the poll source for that, so treat the size of the surprise as soft. Direction isn't in doubt.

Marcus Hayes

Cushing drew six hundred twenty four thousand barrels, reversing the prior week's build. Gasoline stocks built three point eight seven million barrels. Distillate fell one point four six two million. Refinery crude runs dropped one hundred twenty three thousand barrels per day, and utilization softened from ninety three point four percent. On price, the last E I A spot print I can confirm is Monday. W T I at Cushing was one hundred five dollars and twenty five cents, down from one hundred nine seventy two on Friday.

Marcus Hayes

Now the line that matters to you. Everything else drew. PADD four, the Rockies, built one point four one nine million barrels to twenty four point nine one five million, up from twenty three point four nine six. The Midwest built two hundred forty five thousand. The Gulf Coast drew one point five four two million. The national tape says tight. The Rockies tape says barrels are backing up into local tankage.

Marcus Hayes

Uinta Basin. Waxy crude production stays active in Duchesne and Uintah counties. Yellow wax keeps its light sweet character, thirty eight to forty four A P I, but the high pour points still demand insulated trucks and heated coiled rail cars. The Salt Lake City refineries remain a captive outlet, roughly ninety thousand barrels per day of capacity across five plants. The Uinta Basin Railway, the eighty five to eighty eight mile project, is still tied up in regulatory and lower court procedure after the Supreme Court remand. Nothing new on financing or construction. Operators keep leaning on truck to rail transloading, with Wildcat the example.

Marcus Hayes

The rail math hasn't improved. Freight plus heated car lease costs eat ten to fifteen dollars a barrel to the Gulf Coast. Against Salt Lake City postings, spot rail is out of the money, so rail loading is mostly term commitments. I have no fresh turnaround news for the Salt Lake refineries today.

Marcus Hayes

Bakken. Production is steady above one point two million barrels per day. Pipeline capacity is generally well utilized, and the Dakota Access line is absorbing core barrels toward Patoka and on to Nederland and St. James. As Double H moves toward N G L service, marginal volumes have shifted to Bridger and Belle Fourche toward Gernzee, and to D A P L. East Daley flagged that unwinding back in May of last year. Crude by rail loadings remain subdued, a niche safety valve for term destinations on both coasts, not an open arbitrage. No Director's Cut or flaring rule news in this window.

Marcus Hayes

Powder River. Turner, Parkman and Niobrara development keeps sweet barrels flowing into Casper and Gernzee gathering lines. Continental, Anschutz, Devon and EOG are drilling with discipline, nothing newsworthy in activity. The constraint is downstream. Regional gathering throughput is limited by apportionment out of the hub.

Marcus Hayes

Which brings us to Gernzee, the priority. Think of it as one funnel. Canadian Express barrels come in from the north. Powder River gathering comes in from the west. Bridger and Belle Fourche bring Bakken crude from the north. All of it has to leave south or east on two main outlets.

Marcus Hayes

Those outlets are Pony Express toward Cushing and Platte toward Wood River and Patoka. The nameplate figures in my notes are roughly four hundred thirty thousand barrels per day for Pony Express and about one hundred forty five thousand for Platte. Both face tight capacity and monthly nomination proration. I'm treating those as approximate, not confirmed today.

Marcus Hayes

Here's the mechanism, and it follows what we've been tracking on southbound proration. When nominations exceed space, committed shippers get their share. Uncommitted barrels have two choices. They compete for spot space, or they discount against Cushing and Clearbrook until someone will clear them into local storage. That's where a Rockies discount comes from. I don't have a confirmed Gernzee differential print this morning, so I won't give you a number. The direction is under downward pressure, not tightening.

Marcus Hayes

The E I A data backs that up. That one point four two million barrel build in PADD four is the physical footprint of the congestion. Barrels that can't get south are sitting in tanks at the hub and the regional farms. The national draws are real. They just aren't reaching Gernzee, because the pipes between Wyoming and Cushing are the limit, not demand.

Marcus Hayes

So the netback question on your call is simple. Rockies barrels are choosing between a proration queue and a discount, and the Bakken volumes redirected from Double H add to that queue. Watch next week's PADD four number. A second build would tell you the funnel is still jammed. That's the brief.