North America Quarterly

Published at 17:03 23 May 2017 by . Last edited 11:17 22 Aug 2019.

This is the May 2017 edition of our North America Quarterly, covering all important aspects of the region, with a particular focus on the growth of US production and its impact on regional and global balances for both crude and products. The Quarterly is designed to be the most comprehensive guide to US and Canadian production, midstream projects, US and Canadian crude balances, regional differentials, and the US refining industry.

Inside this edition:

  • In Focus: With the start-up of DAPL just a week away, many questions remain unanswered. In this piece, we attempt to predict the ultimate destination of Bakken crude travelling on DAPL and analyse the current flows out of the Williston basin that may fall victim to the pipeline’s voracious appetite.
  • In Focus: Weak US demand readings for Q1 17 have raised several questions. But we believe these were a result of adverse weather, higher prices, destocking and slower growth momentum, which are likely to be transient as stronger demand for diesel and from the petrochemical industry offsets softer gasoline demand for the rest of the year.
  • Outlook for crude: With crude exports likely to play an important role in balancing the North American crude market this year, we assess the potential export markets for shale oil and identify potential headwinds for producers who will be forced to push their material into international markets later this year. Conversely, US sour crude exports will be a fleeting occurrence, gyrating alongside seasonal maintenance patterns on the USGC.
  • Outlook for products: The travesty that is the LatAm refining sector has been a boon for US products markets, providing a willing sinkhole for record US refinery runs. However, the gloomy outlook for LatAm demand suggests further upside from current levels is unlikely.
  • Outlook for crude production: We forecast US crude output will rise by 0.5 mb/d y/y this year, and our review of company-level production guidance reveals a similar aggregated growth rate. Larger operators will contribute 80% of the growth, with small producers adding 0.1 mb/d. Ambitious plans for free cashflow neutrality appear to have been lost in the fervour of the flat-price rally as the mantra of production growth at all costs returns.

The North America Quarterly also provides a detailed regular update on pipeline projects, rail capacity, US PADD by PADD crude balances, Canadian regional crude balances, US, Canadian and Mexican regional refinery slates, Canadian crude balances, product demand and cracks, crude imports by grade, shale plays by basin, US independents hedging activity in 2016 and 2017, and the latest production data, including rig counts, and technological and regulatory developments affecting the domestic oil industry.

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