North American Midcontinent Oil Forecast

NORTH AMERICAN MIDCONTINENT OIL FORECAST
February 5, 2021
Inventories at Cushing declined sharply in January, with the WTI front month
contract flipping into backwardation at the end of the month
KEY CONCEPTS AND PRICES
The WTI (Cushing) price increased sharply during January, averaging $52/b during the month
◼ The average for US shale production will be lower during 2021 year on year, but the end of 2021 will be similar to end of 2020 levels
◼ Refinery runs in the US continued to increase in January, but remained more than 1.5 million b/d below January 2020
◼ Inventories at Cushing decreased by 10.5 million barrels during January, and the WTI 1:2 contracts flipped into backwardation late in the
month. Further draws are expected during February
◼ Exports increased slightly in January to 3.0 million b/d and imports increased to 6.0 million b/d
◼ The US oil rig count increased by 28 in January, ending the month at 295 rigs
PRODUCTION
Midcontinent production increased in November, with Canadian production continuing to move higher as US production declined
◼ November US Midcontinent production decreased by 95,000 b/d to 7.9 million b/d
◼ Year-on-year November US Midcontinent production was down by 1.4 million b/d, with all the major shale basins trending downward
◼ Annual average US Midcontinent production is expected to be down 575,000 b/d in 2020, and down 660,000 b/d in 2021
◼ November Western Canadian supply (production plus diluent) increased 335,000 b/d to 4.8 million b/d
◼ Year-on-year November Western Canadian supply was up 55,000 b/d
◼ Western Canadian supply is expected to be down 250,000 b/d for 2020 on average, and up 410,000 b/d in 2021
INVENTORY
US commercial crude inventories decreased by 9.8 million barrels in January, while the SPR was flat
◼ PADD 2 inventories (including Cushing) decreased 11.0 million barrels in January, and commercial inventories in PADD 3 decreased by 3.0
million barrels
◼ Western Canadian stocks increased in December, but remained below exit 2019 levels
◼ US commercial crude stocks decreased to 475.7 million barrels during January, ending the month 40.7 million barrels above the level at
the end of January 2020
YEAR-ON-YEAR PRODUCTION DOWN 1.4 MILLION B/D IN NOVEMBER

US Midcontinent Onshore Crude Oil Production
10.0 Rockies -
MT/WY/CO/UT
8.0
Kansas/Oklahoma
6.0 /N&E Texas
Permian Basin
4.0
2.0 Eagle Ford
0.0
North Dakota
-2.0
-4.0 Y/Y Change
Jan17 Jul17 Jan18 Jul18 Jan19 Jul19 Jan20 Jul20 Jan21 Jul21 Jan22 Jul22
globaloilanalytics@spglobal.com
NORTH AMERICAN MIDCONTINENT OIL FEBRUARY 5, 2021
FORECAST
TABLE 1: CRUDE OIL PRICES AND DIFFERENTIALS

WTI Dated Syncrude Mxd Swt WCS Bakken-CL Wy Swt Mid Swt WTS
$/Bbl Cushing Brent HLS LLS vs WTI vs WTI vs WTI vs WTI vs WTI vs WTI vs WTI
Jan-21 51.94 54.84 53.63 54.20 -3.35 -4.75 -13.41 -2.27 -1.80 1.21 1.39
Feb-21 51.57 54.00 53.05 53.50 -2.71 -4.23 -12.02 -1.62 -1.57 0.86 1.01
Mar-21 52.68 55.00 54.28 54.43 -2.63 -3.98 -10.50 -1.48 -1.20 0.62 0.72
Apr-21 53.63 56.00 55.47 55.62 -1.83 -3.48 -11.51 -0.93 -0.45 0.88 0.98
May-21 54.58 57.00 56.22 56.52 -1.13 -2.93 -12.17 -0.58 -0.10 0.84 0.94
Jun-21 55.65 58.00 57.26 57.71 -1.33 -3.38 -13.10 -0.38 -0.20 0.91 0.96
Jul-21 56.53 59.00 57.99 58.69 -1.58 -3.48 -13.29 -0.68 -0.25 1.01 1.06
Aug-21 56.74 59.00 58.28 58.83 -1.98 -3.68 -11.31 -1.09 -0.25 0.94 0.99
Sep-21 55.05 57.00 56.07 56.77 -2.04 -4.09 -9.76 -1.30 -0.20 0.87 0.92
Oct-21 54.17 56.00 55.61 55.93 -2.20 -4.40 -10.47 -1.73 -0.15 0.91 0.86
Nov-21 53.31 55.00 54.14 54.74 -2.37 -4.87 -12.17 -1.67 -0.20 0.68 0.63
Dec-21 53.23 55.00 54.37 54.62 -2.83 -5.33 -12.42 -1.83 -0.25 0.64 0.59
Jan-22 51.00 53.00 52.33 52.51 -2.68 -5.43 -11.01 -1.93 -0.35 1.11 1.06
Feb-22 50.05 52.00 51.40 51.50 -2.56 -5.21 -10.04 -1.46 -0.30 1.00 0.95
Mar-22 50.02 52.00 51.59 51.49 -1.04 -4.04 -10.16 -0.79 -0.20 1.00 0.95
Apr-22 50.98 53.00 52.48 52.48 0.05 -3.20 -10.01 -0.05 -0.05 1.07 0.97
May-22 51.89 54.00 53.32 53.47 -0.68 -3.48 -9.43 -0.58 0.05 1.19 1.09
Jun-22 52.82 55.00 54.26 54.46 -1.86 -4.61 -9.06 -1.71 0.00 1.32 1.22
Jul-22 53.88 56.00 55.10 55.45 -2.20 -4.80 -8.93 -1.70 -0.05 1.14 1.04
Aug-22 52.99 55.00 54.03 54.43 -2.22 -5.12 -10.27 -1.92 -0.10 0.90 0.70
Sep-22 51.85 54.00 52.86 53.41 -1.65 -4.65 -9.78 -1.35 -0.15 1.16 0.96
Oct-22 51.95 54.00 53.22 53.39 -1.83 -4.93 -11.26 -1.53 -0.20 0.94 0.74
Nov-22 52.89 55.00 53.92 54.37 -2.27 -5.02 -11.96 -1.77 -0.25 1.04 0.84
Dec-22 53.85 56.00 55.25 55.35 -2.76 -5.26 -12.39 -1.86 -0.29 1.10 0.90
TABLE 2: CUSHING CRUDE BALANCE

Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21
Supply
Local Production 0.57 0.57 0.56 0.56 0.55 0.55 0.54
Incoming Pipelines 2.43 2.28 2.24 2.28 2.25 2.23 2.48
Total 3.00 2.85 2.81 2.84 2.80 2.78 3.02
Demand
Refineries 1.13 1.09 1.04 0.99 0.93 0.96 1.02
Outgoing Pipelines 1.89 2.10 1.92 1.93 1.94 1.94 1.95
Total 3.01 3.20 2.96 2.92 2.87 2.90 2.97
Inv Chg -0.01 -0.34 -0.15 -0.08 -0.07 -0.12 0.06
End Month Stock 59.2 48.7 44.4 42.0 39.9 36.0 37.7
Max Op. Capacity (MMBbls) 80.6 80.6 80.6 80.6 80.6 80.6 80.6
© 2021 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 2
FORECAST
Western Canada
• Western Canadian supply increased by 335,000 b/d to 4.8 million b/d in November, with oil sands production
reaching new all-time highs
• On average, supply is expected to be 250,000 b/d lower in 2020 year on year, and up 410,000 b/d in 2021
• The rail arb opened to the USGC for some lower cost movements in mid-December, and remained open
during January
• Western Canadian pipelines ran at strong levels at the end of 2020 and will continue running at high
utilization rates for most of 2021, despite pipeline capacity additions
• Enbridge received state approvals to construct the Line 5 tunnel after having been ordered during the prior
month by Michigan’s governor to shut the line down in May 2021
• The new US Presidential administration rescinded Keystone XL’s cross border permit immediately after
taking office in January. Expansions to the base Keystone pipeline and various Enbridge pipelines should be
sufficient to bridge the capacity gap through the end of the decade
• The WCS Hardisty/Nederland spread strengthened by $0.3/b during January to $11.7/b, with the rail arb to
the USGC open for the entire month
Supply (production plus diluent) in Western Canada Production

Western Canadian Western Canada increased by
production up 335,000 b/d to 4.8 million b/d in 5.4
Million b/d ‘000 b/d (Change)
1400
335,000 b/d during November from October. 5.1

Forecast
1100
November, up Preliminary data for December 4.8 800
55,000 b/d vs. shows an additional increase of 4.5 500

prior year 200,000 b/d to 5.0 million b/d as 4.2 200
oil sands production hit 3.9 (100)
consecutive all-time highs in
November and December. The
3.6 (400)
surge in production came from 3.3 (700)
record mining levels, supporting 3.0

Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
(1000)
highs across the upgraders at 1.35 Production Y-O-Y Change
million b/d and at the non-

upgraded Kearl mine. In-situ also
hit a 2020 high to end the year at Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
1.65 million b/d, slightly below the record in December 2019.
The oil rig count in Canada rose to 98 rigs at the end of January, well below the 160 rigs that were drilling at the
same time last year. This decline in drilling activity is expected to result in flat to declining production in 1H21
from conventional and shale assets, before a stronger rig count following the spring breakup season helps lead
to minor growth in the latter half of the year.
Despite ending the year with record production, supply in 2020 is expected to be 2 50,000 b/d lower year on year.
2021 supply is expected to rebound 410,000 b/d primarily supported by higher oil sands production. Oil sands
operators such as Suncor, CNRL, Imperial, and MEG have guided 2021 increased capital expenditure
expectations, all expecting to
grow their production.
Western Canadian Crude Differentials to WTI
As production increased
Crude stocks in significantly, Alberta inventories
$10
$/b ‘000 b/d (Bars)
300
Alberta increased grew in December, up 3.9 million

$5
$0
250
200
in December, but barrels, or 126,000 b/d. Outright ($5) 150
ended the year inventories finished the year at

($10)
($15)
100
50
lower than exit 70.4 million barrels, with roughly 8 ($20) 0
2019 million barrels of effective ($25)

($30)
(50)
(100)
capacity still available. An ($35) (150)
additional 1.5 million barrels of ($40) (200)
storage capacity is being added in ($45)

($50)
(250)
(300)
Q1 2021 at the Hardisty terminal. Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
Inventories from the beginning of Western Canada Surplus/Deficit (MB/D) LLS Bakken Clearbrook WCS Mixed Swt Syncrude
2020 to the end dropped a total of

4.5 million barrels. Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
FORECAST
As production continues its

strength into 2021, pipeline flows Western Canada Production/Transportation Balance
are expected to remain strong
and return to pre-COVID levels. Western Canada Supply and Takeaway Capacity
Million b/d
Higher utilization on the outbound 6.5
6.0
pipelines resulted in the arb for 5.5
spot pipeline movements re- 5.0

4.5
opening in December and 4.0
remaining open for most of 3.5

3.0
January. Rail movements out of 2.5 Note: Western Canadian Supply
includes Bakken entering Enbridge
Western Canada grew 2.0

1.5
system at Cromer and Regina, but
not Clearbrook
significantly in November up to 1.0
175,000 b/d and are expected to 0.5

0.0
remain above 100,000 b/d in 1Q2018 3Q2018
W. Can Refineries
1Q2019 3Q2019
Barge
1Q2020
Pipelines
3Q2020 1Q2021
Rail
3Q2021
W. Can. Supply
1Q2022 3Q2022
December and into January. The

differential between Hardisty and Data color order: Complimentary colors:
Nederland was wide enough

Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
during December and early January to encourage some additional movements of lower cost rail, but the spread
compressed in early February. Despite production rising into the end of the year, lower inflows from the Bakken
and small additions to pipeline capacity out of Western Canada (50,000 b/d on the Enbridge system and 2 5,000
b/d on Express) will offer more space for Canadian barrels to move out of the region than during the same
timeframe last year. Additionally, the Keystone pipeline plans to expand by 50,000 b/d, and the Express pipeline
by an additional 25,000 b/d, during 2021.
In one of President Biden’s first acts as president, Keystone XL’s cross-border permit was revoked. TC Energy
halted all construction and has abandoned the long-delayed project. 19 companies had committed space on
Keystone XL. Operators will continue to have to heavily rely on the existing Keystone and Enbridge systems to
access the USGC markets by pipe, while the importance of building the Line 3 replacement project and Trans
Mountain Expansion has increased significantly. TC Energy had launched an open season soliciting bids for
80,000 b/d of capacity on the base Keystone pipeline which will end on Feb 19, 2021, though it is unclear if the
company will continue ahead with the project now that Keystone XL is dead.
Construction continues on the Line 3 replacement project, which is scheduled to commence service in Q4 2021.
Enbridge has recently won numerous court decisions from various indigenous tribes and environmental groups
attempting to halt construction on the project. Elsewhere, Enbridge received state approvals to construct the
Line 5 tunnel project from Michigan’s Department of Environment, Great Lakes, and Energy. The project still
needs to receive permits from the US Army Corp of Engineers while also needing approval following a review
from the Michigan Public Service Commission.
The Trans Mountain pipeline expansion continues to progress as well. TMX stated the pipeline is 22% complete
at the end of 2020, with the in-service date still expected in December 2022. Platts Analytics continues to
account for delays which could occur and is forecasting the pipeline to be complete in mid -2023.
The Syncrude differential to WTI

The WCS CMA strengthened by $0.9/b in
Syncrude Differential to WTI Actual/Outlook and Refiner Parity
differential vs. WTI January to an average discount of
CMA was flat in $3.5/b, and continued to $5
$/b
January, while the strengthen in early February. $0
Syncrude Syncrude production is expected

differential to remain high during the winter ($5)
strengthened by months, and the differential is ($10)
$0.9/b forecast to remain near current

levels until prices start to ($15)
strengthen ahead of the spring ($20)
maintenance season. With

adequate pipeline space available ($25)
out of Western Canada during the Actual/Outlook Chicago WTI Parity Cushing WTI Parity Diff to CMA
year, the Syncrude differential is

expected to trade at a narrow Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
discount to WTI-Cushing for most

of 2021.
FORECAST
The WCS Hardisty differential to WCS Differential to WTI Actual/Outlook and Refiner Parity
WTI CMA was flat in January
versus the prior month, averaging $5
$/b
a discount of $13.5/b, though

there was several dollars’ worth ($5)
of variability during the month. ($15)

The differential strengthened
slightly during the first few days ($25)
of February (March contract), and

($35)
is expected to remain stronger
during the month, with the ($45)
market starting to anticipate
spring maintenance season. The Actual/Outlook WCS-WTI @ Maya Parity - P/L WCS-WTI @ Maya Parity - Rail Diff to CMA
spread between Hardisty and

Nederland averaged $11.7/b during Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
January, with the rail arb open for

lower cost movements during the month. The spread to the Gulf Coast compressed in early February and is
expected to be narrower for the next few months, with lower outbound flows expected during Western Canada’s
production maintenance season. Pipeline space out of Western Canada is expected to be highly utilized during
2021, but sufficient to move the marginal barrel for most of the year, resulting in the WCS Hardisty differential to
WTI-Cushing remaining in the $10/b to $15/b range.
Bakken/Williston
• Average annual production is expected to be 250,000 b/d lower in 2020 year-on-year, and down an
additional 55,000 b/d in 2021
• Drilling rigs in the Bakken increased by 1 in January to 12, which is 41 less than the same period in 2020
• Production decreased by 20,000 barrels in November month on month, and is expected to trend downward
through mid-2021
• The US Court of Appeals for the District of Columbia Circuit ruled that the Army Corp of Engineers must
conduct a new, more extensive, Environmental Impact Statement (EIS) for the Dakota Access Pipeline
(DAPL). The line can continue flowing for the time being, but could face further legal challenges
• The trade flow balance out of the Bakken will be strongly influenced by the fate of DAPL. If DAPL remains
operational, pipeline space will be more than sufficient, rail will move only a baseload, and the differential to
WTI-Cushing will be narrow. Without DAPL, spot rail will be required, and the differential will weaken by
several dollars versus the base case.
Bakken production Bakken crude production in North Bakken Production

decreased by Dakota and Montana decreased
20,000 b/d in by 20,000 b/d in November and 1.7
Forecast
400
was 335,000 b/d lower year on

1.6 300
November month 1.5 200
on month, and is year. The final number for well 1.4 100
completions in October came in at
down 335,000 b/d 1.3 0
54, with the November

vs. prior year
1.2 (100)
preliminary estimate at 74. The 1.1 (200)
1.0 (300)
number of wells awaiting 0.9 (400)
completion decreased by 14 in 0.8 (500)
November to 710. The North 0.7 (600)

Dakota rig count increased by 1 in
January, reaching 12 rigs. Production Y-O-Y Change
Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
FORECAST
After holding relatively flat in Bakken Production/Transportation Balance

October versus September,
production in the Bakken started
Bakken Supply and Takeaway Capacity
to decline in November. With rig 2.7
Million b/d
counts and drilling activity 2.4
remaining subdued, this 2.1
1.8
downward trend in production is 1.5
expected to persist through mid- 1.2
2021. After that time, new drilling 0.9
will start to more than offset 0.6
declines in existing production,

0.3
0.0
causing volumes to trend upward. 1Q2018 3Q2018 1Q2019 3Q2019 1Q2020 3Q2020 1Q2021 3Q2021 1Q2022 3Q2022
However, by the end of 2021, Refinery Pipe Rail North Dakota Production
production in the Bakken is still

expected to be lower than exit Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
2020. The annual average for

Bakken production is forecast to be 250,000 b/d lower in 2020 year-on-year and 55,000 b/d lower in 2021.
Moving into 2022, production is expected to continue trending upward, averaging 1.3 million b/d during the
second half of the year.
In late January, the US Court of Appeals for the District of Columbia Circuit ruled that the Army Corp of Engineers
must conduct a new, more extensive, Environmental Impact Statement (EIS) for the Dakota Access Pipelin e
(DAPL). The more extensive EIS could take more than a year to complete, potentially stretching the process into
2022. The court did reiterate its previous ruling that the pipeline should be allowed to continue flowing for the
time being, though further litigation against that decision is possible. Additionally, the new US Presidential
administration recently rescinded Keystone XL’s cross border permit, which adds to the risk of the ultimate
outcome of the new EIS after it is completed. Based on the current litigation status, Platts Analytics continues to
model DAPL as remaining operational; however, litigation against the pipeline will still need to be closely
monitored. The current forecast also accounts for Energy Transfer’s planned capacity increase of DAPL to
750,000 b/d during Q3 2021, which is also at risk based on the current litigation.
If DAPL were to shut down, all of the other pipelines exiting the region (to PADD 2, PADD 4, and Western Canada)
would fully max out, trucking volumes into Western Canada would increase, and spot rail barrels would be
required, even at the lowest point in our production forecast (mid-2021). A baseload of rail is already expected to
move into PADDs 5 and 1 during 2021, with the incremental spot barrels from a no -DAPL case primarily moving to
PADDs 1 and 3. This would cause the Bakken-Clearbrook price to weaken by several dollars against WTI-Cushing
versus our current base case.
The Bakken- The in-basin Bakken differential Bakken (Clearbrook) Differential to WTI
Clearbrook to WTI to WTI CMA strengthened by Actual/Outlook and Refiner Parity
CMA differential $0.5/b during January, and the $5
$/b
strengthened by Bakken-CL differential to WTI CMA

strengthened by $0.2/b. The
$0.2/b in January $0
Bakken differentials will
experience some seasonality ($5)
throughout 2021 as the region
competes with other light-sweet ($10)
grades in the Midwest, but more
than adequate pipeline space will ($15)
keep the differential at a narrow Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
discount to WTI-Cushing. Actual/Outlook Chicago WTI Parity Cushing WTI Parity Diff to CMA
FORECAST
If DAPL can continue flowing and Williston Takeaway

moves forward with the planned
expansion, the Bakken region will 1.6 Million b/d
have more than adequate pipeline 1.4
space for the remainder of the 1.2
decade. Pipeline flows into 1.0

Western Canada will be minimal, 0.8
and crude by rail will primarily 0.6
remain at a baseload into both
0.4
PADDs 5 and 1. In this scenario,
0.2
the Bakken-CL price will average
0.0
a small discount to WTI-Cushing Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
over the next year, and the rail arb Pipeline Capacity Pipe Outflows Rail Outflows
for spot barrels will primarily be

closed. Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
The Rockies
• Annual average production in the Rockies is expected to be 125,000 b/d lower in 2020 year on year, and
decline by an additional 160,000 b/d in 2021
• Although inflows from the Bakken and Western Canada will be higher in 2021 year on year, that increase will
be more than offset by lower local production, resulting in lower supply in the region
• With supply lower and refinery runs higher in 2021 year on year, there will be less barrels needing to exit the
region by pipeline, causing pipeline utilization to be very weak
• Inventories in the Rockies remain slightly above average levels, with draws expected during 2021
Crude production in the Rockies Rockies (MT/WY/CO/UT) Production

Rockies decreased by 10,000 b/d in
production November month on month to Million b/d ‘000 b/d (Change)
1.1 300
declined by 10,000 715,000 b/d and was 250,000 b/d Forecast
b/d in November, lower year on year. Similar to the

1.0 200
and is down Bakken, production in the Rockies

0.9 100
250,000 b/d is forecast to trend downward 0.8 0
versus the prior through mid-2021 then trend 0.7 (100)
year upward during the second half of 0.6 (200)
the year but end the year below 0.5 (300)
December 2020 levels. On 0.4 (400)

average, production is expected Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
* Excludes the Montana Bakken
to be 125,000 b/d lower in 2020 Production Y-O-Y Change
year on year, and down by an

additional 160,000 b/d in 2021. Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
The downward trend will reverse

in 2022, with average annual production increasing by 50,000 b/d year on year. This, however, is still well below
2019 levels.
After dipping in 2020, flows into the Rockies from Western Canada and the Bakken will be higher during 2021
than during the 2019 timeframe. The Express pipeline, which runs from Western Canada into the Rockies,
expanded by 25,000 b/d in mid-2020 and is planning to add an additional 25,000 b/d during 2021. As Canadian
production rebounds strongly during 2021, outbound capacity will be highly utilized for most of the year.
FORECAST
The increase in inflows, however, Rockies Production/Transportation Balance

will be more than offset by lower
local production, causing total
Rockies Supply and Takeaway Capacity
supply in the region to be lower. 2.5
Million b/d
Additionally, refinery runs in the

2.0
Rockies will be higher during 2021
year on year as demand recovers, 1.5
though not fully rebounding to 1.0

2019 level. Lower supply, coupled
with higher refinery demand, will 0.5
result in less barrels needing to 0.0
exit the region by pipeline. 1Q2018 3Q2018 1Q2019 3Q2019 1Q2020 3Q2020 1Q2021 3Q2021 1Q2022 3Q2022
Refineries Pipelines Rail/Truck/Other Rockies Production + Imports
Magellan completed the 100,000

b/d expansion to the Saddlehorn Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
pipeline during late-2020, which

moves barrels from the Rockies to Cushing. Ample pipeline space, coupled with subdued production growth, will
result in low utilization of outbound pipelines from the Rockies for the remainder of t he decade (barring the
closure or repurposing of a line during that timeframe).
Rockies Crude stocks in the Rockies increased by 0.5 million barrels in January, ending the month at 24.3 million barrels.
inventories This inventory level is above the average level for the region, but within the normal range for storage tank
increased in utilization. Inventory draws are expected during 2021 as local production declines, resulting in tank utilization
averaging below normal historical levels for most of the year.
January
The Bakken-Guernsey differential PADD IV (Rockies) Crude Differentials to WTI
to WTI CMA was flat during
January at a discount of $1.9/b, $4
$/b Million Barrels (Bars)
28
Rockies while the differential versus front

$2 26
differentials were month WTI-Cushing weakened by
flat in January $0.1/b to an average discount of $0 24
versus December $1.8/b. As declining local ($2) 22
production causes pipeline ($4) 20
capacity to become increasingly ($6) 18

underutilized during the year, the
($8) 16
Rockies differentials are expected
to strengthen against WTI- ($10)
Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
14
Cushing to narrow discounts, and PADD IV (MMB) Wyoming Swt Diff to CMA
potentially trade at a premium at

times. Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
Midland – Permian Basin

• Average annual production will be 120,000 b/d higher in 2020 year on year and 200,000 b/d lower in 2021,
with production rebounding in mid-2021 and ending the year above December 2020 levels
• Permian production declined 30,000 barrels in November month on month, and is expected to see a choppy
downward trend through mid-2021
• Rigs in the Permian increased by 17 during December to 192. Rigs are down 214 versus January 2020, but up
76 from the trough in August 2020
• Between production declining through mid-2021 and incremental pipeline capacity coming online late in the
year, pipeline utilization out of the Permian will remain subdued during 2021
• The Midland/Cushing and Midland/MEH differentials both strengthened in January
FORECAST
Crude and condensate production

Permian Permian Basin (W. Texas/New Mexico) Production
in the Permian Basin of West
production
Texas and New Mexico decreased ‘000 b/d (Change)
decreased in
Million b/d
5.5 1400
by 30,000 b/d in November to 4.3

Forecast
November and 5.0 1100
million b/d and was 425,000 b/d

remains lower year 4.5 800
lower than the same timeframe

on year last year. Although rigs are up by
4.0 500
3.5 200
76 from the trough that took place 3.0 (100)

in August 2020, they remain 214 2.5 (400)
lower than during the same 2.0 (700)
timeframe last year. Production in 1.5 (1000)
the Permian is expected to trough Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
during mid-2021, but the Production Y-O-Y Change
downward trend until that time is

likely to be choppy. During the Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
second half of the year production

will start to trend upward at the strong pace, ending 2021 well above the level being produced at the end of 2020.
Production growth will remain strong through 2022, rebounded by the end of the year to the volumes seen in
early 2020 before the price collapse.
As production declines through Permian Basin Production/Transportation Balance

mid-2021 and incremental
pipeline capacity comes online by
Permian Supply and Takeaway Capacity
the end of the year (Wink to 9.0
Million b/d
Webster project), the utilization of 8.0
pipelines exiting of the region will 7.0
be low. Between the existing lines

6.0
5.0
and the capacity additions during 4.0
2021, outbound capacity will reach 3.0
more than 7.5 million b/d by early 2.0
2022, resulting in there continuing

1.0
0.0
to be ample spare capacity on 1Q2017 3Q2017 1Q2018 3Q2018 1Q2019 3Q2019 1Q2020 3Q2020 1Q2021 3Q2021 1Q2022 3Q2022
pipelines exiting the region Refineries Pipelines Rail/Truck/Other Permian Production
despite the rebound in production

by late 2022. Unless consolidation Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
of pipeline assets takes place,

these pipelines will remain underutilized through the end of the decade.
However, some repurposing of West Texas Crude Pipeline Shipments

assets has already been
announced, and other 4.5
Million b/d
announcements may follow over 4.0
the next couple of years. Energy 3.5
Transfer announced in December 3.0
plans to use a combination of its 2.5 Remaining volume goes to local refineries and to eastern
PADD II refineries via WTG/Mid-Valley pipelines
own pipelines and third-party 2.0
lines to ship barrels from Cushing 1.5
1.0
to Nederland. The Permian 0.5
Express 1 pipeline (which picks up 0.0
Permian barrels from a pipeline Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
junction in north Texas and moves Pipelines to Cushing Pipelines to Gulf Coast
them to Nederland), would be

repurposed to make up part of the Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
new system (more information in

the Cushing section).
Preliminary data shows a build in inventories in the Midland portion of the Permian during January, while total
commercial inventories in PADD 3 decreased by 3.0 million barrels to 255.6 million barrels. After drawing for 5-
FORECAST
consecutive months, the SPR was flat in January. Inventories in PADD 3 ended January at 25.5 million barrels
above the same timeframe in 2020, but between tank and pipeline additions (line fill), tank utilization is below
average levels.
WTI-Midland strengthened by Midland (Permian Basin) Crude Differentials to WTI

$0.3/b against WTI-Cushing
during January, averaging a $3
$/b ‘000 b/d (Bars)
150
premium of $1.2/b during the $0 100

month. The WTI-Midland/MEH
($3) 50
differential strengthened by
$0.1/b during the month to an ($6) 0
average discount of $0.5/b. ($9) (50)
Pipeline capacity out of the ($12) (100)
Permian will be well in excess of ($15) (150)
demand for several years, which ($18) (200)

should keep the Midland/MEH Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
differential narrow and keep West Texas Surplus/Deficit (MB/D) Midland Swt WTS
Midland primarily trading at a

premium to WTI-Cushing. Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
The Cushing Area – Oklahoma, Kansas, North Texas

• Annual average production in the greater Cushing area is expected to decline by 150,000 b/d in 2020 year on
year, and fall by an additional 80,000 b/d during 2021
• Inventories at Cushing decreased by 10.5 million barrels during January and are expected to continue
trending downward during Q1 2021
• Refinery runs in PADD 2 increased by 200,000 b/d in January to average 3.6 million b/d. Runs in 2021 are
expected to be higher than during 2020, but lower than during 2019
• Higher refinery runs in PADD 2 and lower net flows resulted in a strong draw on Cushing during January.
Pipeline capacity from Cushing to the USGC will be more than sufficient to move barrels during 2021, barring
a major pipeline disruption
Cushing area Production in North Texas, Kansas/Oklahoma/N&E Texas Production

production was Oklahoma, and Kansas decreased
by 15,000 b/d in November month Million b/d ‘000 b/d (Change)
down in November, 1.0 300
on month and was down 185,000 Forecast

and 185,000 b/d 0.9 200
b/d year on year. Production

lower vs. prior year 0.8 100
ended 2020 nearly 200,000 b/d 0.7 0
lower than the levels at the end of 0.6 (100)

2019. Unlike the other major shale 0.5 (200)
regions, production is expected to 0.4 (300)
gradually decline throughout the 0.3 (400)
entirety of 2021, and continue 0.2 (500)
sliding during 2022. As companies Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
have reigned in their planned Production Y-O-Y Change
Capex spend over the past year,

other regions of the US are being Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
favored due to their superior

economics. After averaging 770,000 b/d in 2019, production in this region is forecast to average 500,000 b/d in
2022.
FORECAST
Inventories at Cushing decreased Atlantic Basin Crude Differentials to WTI

by 10.5 million barrels during
January, ending the month at $12
$/b % (Bars)
100%
48.7 million barrels. Inventories in

the remainder of PADD 2 (ex. $8 75%
North Dakota) declined by 0.5

million barrels during the month $4 50%
to 86.8 million barrels. Inventories

at Cushing ended the month at $0 25%
approximately 60% tank
utilization, and the WTI 1:2 ($4) 0%
contract flipped into Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
backwardation at the end of the Cushing % Op. Capacity LLS Dated Brent
month. With US production

trending downward through mid- Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
year, inventories at Cushing are

expected to continue generally trending downward throughout 1H 2021.
Pipeline flows into PADD 2 from other regions will be higher during 2021 as rising Canadian production
increasingly makes its way into the US. The higher flows from Canada will more than offset lower inflows from
other regions, such as the Bakken, Rockies, and Permian. Refinery runs during 2021 will be higher than during
2020 but remain lower than 2019 levels as end user demand remains lower than pre -Covid levels. Outflows from
PADD 2 will also be higher in 2021 than during 2020, but will remain below the levels that took place in 2019. Even
with barrels that are being drawn from inventory in PADD 2 moving by pipeline to the USGC, there will be ample
spare capacity on the PADD 2 to PADD 3 system during the year. This ample spare capacity will keep the spread
between WTI-Cushing and MEH at narrow levels during 2021, similar to the spread during the second half of
2020.
In early 2022, the Capline pipeline, Cushing Production/Transportation Balance

which will move barrels from
Patoka to St. James, LA, is 4.5
Million b/d
targeting start-up. Additionally, 4.0
Energy Transfer (ET) plans to add 3.5
65,000 b/d to 120,000 b/d of 3.0
capacity from Cushing to the 2.5
USGC using a combination of 2.0
third-party pipelines and its own 1.5
assets, including the Granite

1.0
0.5
Wash pipeline in Oklahoma and
0.0
the Permian Express 1 pipeline 1Q2018 3Q2018 1Q2019 3Q2019 1Q2020 3Q2020 1Q2021 3Q2021 1Q2022 3Q2022
that runs from the Refineries Outgoing Pipelines Effective Max Capacity Production + Incoming Pipelines
Texas/Oklahoma border to
Nederland. The new system will Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
connect at Cushing to ET’s White

Cliffs pipeline, which originates in the Rockies. Between existing infrastructure and these additions, there will be
more than sufficient capacity to move barrels from Cushing to the USGC for several years, keeping the WTI -
Cushing/MEH spread narrow.
The Brent/WTI The Dated Brent/WTI-Cushing differential weakened by $0.1/b in January to $2.9/b. The spread between Cushing
spread and MEH was flat during the month, while MEH strengthened slightly against Dated Brent. Pipeline flows
strengthened between Cushing and the USGC were higher during December and January than during the summer/fall
slightly in January timeframe but were not elevated enough to widen the spread to committed pipeline tariff levels. MEH averaged a
discount of $1.2/b to Dated Brent during January, with the arb for MEH quality barrels into Northwest Europe
fluctuating between open and closed during the month.
The Dated Brent/WTI differential is expected to primarily trade in the $1.5/b - $3.0/b range during 2021, with the
inland portion of the spread remaining narrow due to ample spare capacity on outbound pipelines, and the
offshore portion of the spread remaining relatively narrow due to low freight rates and MEH quality barrels
FORECAST
gaining in value compared to Forties as the year progresses. However, the spread is expected to be wide enough
to encourage exports from the US Gulf Coast throughout the year.
Eagle Ford — South Texas

Eagle Ford Production in the Eagle Ford Eagle Ford Production
production decreased by 20,000 b/d in
decreased by November versus the prior month 1.5
400
20,000 b/d in and was 235,000 b/d lower year 1.4
Forecast
300
November, and on year. The Eagle Ford gained 1

1.3 200
1.2 100
remains rig during January and is up 18 1.1 0
substantially lower rigs from the trough in July. Like 1.0 (100)
vs. the prior year most of the other major shale 0.9
0.8
(200)
(300)
regions, the Eagle Ford is 0.7 (400)
expected to trend downward 0.6 (500)
through mid-2021, then rebound 0.5

0.4
(600)
(700)
during the back half of the year. Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22
On average, Eagle Ford Production Y-O-Y Change
production is expected to be
175,000 b/d lower in 2020 year on Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
year, and down an additional

160,000 b/d in 2021.
Production is expected to steadily trend upward during 2022 but end the year below the levels that occurred in
early 2020 (before the price collapse). Pipeline space will continue to be more than sufficient to move barrels out
of the region during this timeframe.
Gulf Coast Imports/Exports

Preliminary EIA data for January showed imports increasing by 330,000 b/d during the month to average 6.0
million b/d. Despite the large increase month on month, imports remain 600,000 b/d lower than during the same
period last year. Imports increased in every PADD region except PADD 3 during January, with the largest influx
taking place in PADD 2 as flows into the US from Canada increased and with PADD 5 also seeing a sizable uptick.
Aside from the increase in Canadian imports, the largest increases were from Saudi Arabia and Nigeria, which
rose by 78,000 b/d and 68,000 b/d respectively.
Imports from Canada should be Exports are expected to be lower during 2021 due to lower annual
similar during Q1 2021 to the levels average shale production, but increase again in 2022
that took place during Q4 2020
and move higher each quarter of US Imports and Exports
Million b/d
2021 as incremental production 10.0
comes online in Western Canada. 8.0
As refinery runs recover during 6.0
2021 imports from international 4.0
sources are expected to tick 2.0

upward as well; however, like 0.0
refinery runs, they are not
(2.0)
expected to return to the levels
(4.0)
that took place in 2019. Imports 2017 2018 2019 2020 2021 2022
from both Canada and Imports Exports Net Imports
FORECAST
international sources are forecast to continue moving higher in 2022 versus 2021 levels.
Preliminary data Preliminary EIA data for January shows exports increased by 60,000 b/d month on month, averaging 3.0 million
b/d. The export arb for light-sweet barrels from the USGC to Europe fluctuated between open and closed during
shows exports
January and was open in early February. The arbs to Asia were primarily open on paper during January but
increasing by
closed in early February. The arb for medium sour barrels into Asia was open on paper during January and
60,000 b/d in
remained open during early February.
January,
supported by Draws on crude oil inventories in the US remained very strong in January, which helped support crude oil exports
strong inventory during the month. Commercial inventories in the US were 33.0 million barrels above year-ago levels at the end of
draws January but have declined by 65 million barrels since reaching their peak in June 2020. As US production
declines, refinery runs ramp up, and inventories continue to draw down, export volumes are expected to
compress during the first half of 2021. Despite this compression, exports are still expected to range between 2.0
million b/d and 2.5 million b/d for most of 2021, which will keep the US active in the global export market. As US
production ramps up during 2022 exports are expected to trend upward a s well, averaging between 2.5 million
b/d and 3.0 million b/d during the year.
Inland Refining Margins and Product Arbitrage

Syncrude • The Syncrude margin PADD 2 WCS coking and Syncrude cracking margins moved
cracking/ WCS increased by $1.1/b during higher in January, are currently at or above average levels
coking margins January to $9.3/b, which is
Chicago Syncrude Cracking (FCC/HCU) Chicago WCS Coking (FCC/HCU/Coker)
increased in above the 5-year average for $/b
50
$/b
50
January, starting the January timeframe
2021 at or above
40 40
• The WCS margin increased

their 5-year 30 30
by $1.2/b during January to
averages 20 20
$14.3/b. which is similar to
10
the 5-year average for that
10
period 0 0
-10 -10
• Both the Syncrude and WCS Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
margins are expected to Five-year average 2019 2020 2021 2021 Forecast
remain lower than 2019 and

near or slightly below their
seasonal norms through mid-2021
The gasoline crack • The gasoline crack in PADD 2 Gasoline cracks were stronger in January, while diesel
strengthened strengthened by $3.3/b in cracks were weaker. Both remain below seasonal norms
during January, January to $6.4/b, which is
$/b Chicago Unl 87 vs WTI $/b Chicago ULSD vs WTI
while the diesel slightly below the 5-year 50 50
average for that period
crack weakened 40 40
30 30
• The diesel crack in PADD 2
20 20
weakened by $1.4/b in
10
January to $12.0/b, which is
10
below the 5-year average for 0 0
that period -10 -10
-20 -20
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
• Both cracks are expected to
remain below their 5-year Five-year range Five-year avg. 2019 2020 2021 Forecast
averages through the

FORECAST
summer and be near the bottom of their normal ranges. This will continue to present a headwind for
refineries in the region
The RBOB arb was • The Chicago/USGC RBOB The Chicago/USGC RBOB arb was closed during January, and the
closed during arbitrage remained closed ULSD arb was closed for most of the month
January, and the during January, but is $/b Chicago RBOB vs USGC $/b Chicago ULSD vs USGC
ULSD arb was expected to be primarily
20 20
primarily closed 15 15
open during February 10 10
5 5
• The ULSD arbitrage was 0 0
closed for most of January, -5 -5
but slightly reopened at the -10 -10
MIN Five-year range

end of the month -15
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
-15
Five-year avg.
2020
2019
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2021
2021 Forecast
Five-year range Five-year avg. 2019 2020 2021 2021 Forecast
• The RBOB arb should be

mixed through Q1, but open Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
during Q2 as gasoline season

gets underway. The ULSD arb should be primarily closed during 1H2021
Gasoline and • Gasoline inventories in PADD

2 increased during January, Despite rising at the end of 2020, PADD 2 gasoline and
distillate distillate inventories remain below 5-year average levels
inventories both but remain below their 5-year
average level Gasoline - Million Barrels Distillate - Million Barrels
increased during 66
Average
40
RANGE
January 2018
2019
2013-2017
•
62
Distillate inventories 2020 Actual/Forecast
2021 Forecast 35
increased during January, 58
but also remain below their 54 30

5-year average level
50
25
• Gasoline inventories are 46
expected to decline during 1H 42 20

2021 but remain near their JAN MAR MAY JUL SEP NOV JAN MAR MAY JUL SEP NOV
seasonally normal level.

Distillate inventories are Data color order: Complimentary colors: Footer : Never change the footer text on individual slides. Change, turn on or off footer by using
expected to remain below

their seasonal norms in the near term
PADD 2 crude runs were well below their historical range in

Refinery runs in • PADD 2 refinery crude runs Dec, but rose above the 5-year average in January
PADD 2 increased increased by 200,000 b/d in Million b/d
4.2
in January to 3.6 January to average 3.6

million b/d, but remain
4.0
million b/d
150,000 b/d below the same 3.8
period in 2020 3.6
3.4
• Refinery runs in PADD 2 are 3.2

expected to track slightly RANGE
3.0
above the 5-year average 2013-2017
during 1H 2021, but remain

2.8
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
below 2019 levels for most of Average 2018 2019 2020 Actual/Forecast 2021 Forecast
that timeframe
FORECAST
TABLE 3: PADD II CRUDE/PRODUCT BALANCES

2020 2021
MB/D JAN FEB MAR APR MAY JUN JAN FEB MAR APR MAY JUN
GASOLINE:
Ref.Production 2.54 2.27 2.08 1.51 2.00 2.11 2.22 2.29 2.31 2.40 2.42 2.39
Gasoline Yield % 66.9% 60.5% 60.5% 51.8% 64.5% 63.6% 61.4% 65.4% 65.7% 65.8% 65.6% 65.0%
Net Transfers* .10 .31 .17 .13 .16 .24 .12 .17 .24 .26 .25 .25
Demand 2.54 2.54 2.21 1.76 2.16 2.47 2.21 2.38 2.61 2.59 2.76 2.67
Total Stk Change (MMB/D) .09 .03 .04 -.12 -.01 -.12 .13 .07 -.06 .07 -.09 -.03
Stocks (MIL BBLS) 57.9 58.9 60.2 56.5 56.1 52.6 55.2 57.2 55.3 57.3 54.6 53.7
DISTILLATE:
Production 1.16 1.09 1.04 1.11 1.11 1.03 1.10 1.11 1.07 1.11 1.14 1.14
Dist Yield % 30.6% 29.2% 30.3% 38.2% 36.0% 30.9% 30.4% 31.8% 30.5% 30.5% 31.0% 31.0%
Net Transfers* .07 .05 .09 .13 .20 .08 .04 .05 .05 .06 .10 .10
Demand 1.17 1.17 1.22 1.18 1.12 1.23 1.05 1.09 1.10 1.15 1.25 1.30
Stock Change (MMB/D) .06 -.02 -.08 .06 .20 -.12 .09 .07 .02 .03 -.01 -.06
Stocks (MIL BBLS) 33.3 32.8 30.3 32.2 38.2 34.6 30.1 32.1 32.9 33.7 33.4 31.5
CRUDE OIL:
Crude Run 3.79 3.75 3.44 2.91 3.09 3.32 3.62 3.50 3.52 3.65 3.69 3.68
Canadian Imp 2.83 3.07 2.91 2.71 2.32 2.45 2.80 2.65 2.70 2.75 2.75 2.70
Prod/Net Trans*/Other 0.99 0.65 0.95 0.77 0.27 0.73 0.47 0.63 0.80 0.77 0.75 0.94
Stock Change (MMB/D) .03 -.03 .42 .56 -.51 -.14 -.35 -.21 -.02 -.12 -.19 -.04
Stocks (MIL BBLS) 126.5 127.5 126.5 139.5 140.6 136.4 135.5 129.6 128.9 125.2 119.3 118.3
Notes: *Includes net imports and for crude includes net imports outside of Canada.
Inventories based on DOE statistics. Gasoline net transfers includes Blending Components.
TABLE 4: PADD II END MONTH COMMERCIAL STOCKS

MMB JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
GASOLINE
2021 55.2 57.2 55.3 57.3 54.6 53.7
2020 57.9 58.9 60.2 56.5 56.1 52.6 50.7 48.6 46.2 47.6 52.6 51.1
2019 60.8 59.0 54.5 51.6 47.4 49.6 50.2 51.3 51.0 47.2 49.2 55.0
2018 57.7 60.2 57.2 57.2 53.9 53.5 53.4 53.0 53.2 47.8 49.1 56.1
2017 60.5 60.2 57.3 56.8 55.5 53.6 53.1 51.5 50.4 45.9 47.9 52.2
2016 62.3 60.4 57.1 54.6 54.2 53.9 51.9 52.0 51.1 49.8 50.3 53.2
2015 53.4 53.4 52.9 53.3 49.1 50.4 48.2 49.4 47.0 46.0 50.1 53.7
DISTILLATE
2021 30.1 32.1 32.9 33.7 33.4 31.5
2020 33.3 32.8 30.3 32.2 38.2 34.6 34.5 35.3 32.0 27.2 26.4 27.3
2019 34.8 33.1 34.9 35.0 33.3 32.9 32.6 34.0 33.0 26.8 26.7 31.4
2018 31.0 32.7 32.3 31.0 30.9 31.7 32.9 34.8 35.1 27.5 27.9 33.7
2017 35.2 35.2 33.1 35.1 34.4 32.2 33.1 32.0 30.7 25.8 25.4 28.8
2016 34.2 36.0 35.4 33.5 32.4 29.2 31.9 32.1 33.0 32.8 31.2 32.5
2015 32.5 32.4 34.2 34.2 35.0 32.3 31.4 31.4 31.2 26.8 30.2 31.9
CRUDE OIL
2021 135.5 129.6 128.9 125.2 119.3 118.3
2020 127.5 126.5 139.5 156.3 140.6 136.4 140.2 140.1 140.9 146.4 148.3 146.5
2019 133.6 138.1 138.4 137.3 143.6 142.2 134.9 125.7 128.1 134.8 130.1 126.5
2018 118.4 111.2 122.3 125.6 123.7 112.8 107.7 111.1 113.0 124.4 129.4 132.1
2017 150.6 152.2 156.1 159.1 157.0 149.1 144.6 140.6 149.6 153.8 142.8 132.0
2016 145.9 148.3 150.3 153.6 151.7 145.4 147.7 148.1 143.7 141.4 149.2 151.8
2015 116.9 126.7 139.4 139.4 135.6 133.9 133.8 135.3 127.2 132.9 142.5 144.5
FORECAST
OTHER RELEVANT REPORTS
World Oil Market Forecast Tight Oil Operator Review
Fracking Policy Monitor Crude Oil Arbitrage Calculator
U.S. Rig Monitor U.S. Export Facilities Tracker
DOE Weekly Petroleum Infrastructure Tracker
NORTH AMERICAN MIDCONTINENT OIL FORECAST
For inquiries related to the Global Oil markets, please contact our team: globaloilanalytics@spglobal.com.
Global Oil Pricing

Rick Joswick Rafik Saad
Midcontinent Crude Supply

Jenna Delaney Rene Santos
Trade Flows Refining & Oil Products

Tony Starkey Gary Greenstein
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North American Midcontinent Oil Forecast

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NORTH AMERICAN MIDCONTINENT OIL FORECAST

YEAR-ON-YEAR PRODUCTION DOWN 1.4 MILLION B/D IN NOVEMBER

TABLE 1: CRUDE OIL PRICES AND DIFFERENTIALS

TABLE 2: CUSHING CRUDE BALANCE

Supply (production plus diluent) in Western Canada Production

335,000 b/d during November from October. 5.1

November, up Preliminary data for December 4.8 800

55,000 b/d vs. shows an additional increase of 4.5 500

surge in production came from 3.3 (700)

record mining levels, supporting 3.0

highs across the upgraders at 1.35 Production Y-O-Y Change

million b/d and at the non-

1.65 million b/d, slightly below the record in December 2019.

Alberta increased grew in December, up 3.9 million

ended the year inventories finished the year at

2019 million barrels of effective ($25)

storage capacity is being added in ($45)

2020 to the end dropped a total of

As production continues its

spot pipeline movements re- 5.0

remaining open for most of 3.5

Western Canada grew 2.0

significantly in November up to 1.0

175,000 b/d and are expected to 0.5

December and into January. The

Nederland was wide enough

The Syncrude differential to WTI

January, while the strengthen in early February. $0

Syncrude Syncrude production is expected

strengthened by months, and the differential is ($10)

$0.9/b forecast to remain near current

strengthen ahead of the spring ($20)

maintenance season. With

year, the Syncrude differential is

discount to WTI-Cushing for most

a discount of $13.5/b, though

of variability during the month. ($15)

of February (March contract), and

spread between Hardisty and

January, with the rail arb open for

Bakken production Bakken crude production in North Bakken Production

was 335,000 b/d lower year on

54, with the November

preliminary estimate at 74. The 1.1 (200)

November to 710. The North 0.7 (600)

After holding relatively flat in Bakken Production/Transportation Balance

counts and drilling activity 2.4

remaining subdued, this 2.1

2021. After that time, new drilling 0.9

will start to more than offset 0.6

declines in existing production,

production in the Bakken is still

2020. The annual average for

strengthened by Bakken-CL differential to WTI CMA

If DAPL can continue flowing and Williston Takeaway

have more than adequate pipeline 1.4

space for the remainder of the 1.2

decade. Pipeline flows into 1.0