Price impact on Bakken and Rockies differentials may be on hold.
“The Dakota Access oil pipeline can continue to operate amid an ongoing court battle, a U.S. Appeals Court said on Tuesday, setting aside for now a lower court’s order earlier this month to shut and empty the line.”Reuters, 7/14/2020
Source article (opens in new tab): Dakota Access pipeline can keep running amid legal fight: U.S. court
- A federal judge had ordered shutdown of Dakota Access Pipeline (DAPL) on July 6, with effect in August
- This stay issued by the appeals court allows DAPL to keep operating while the permitting legal issues are decided
- DAPL has capacity of 570 MBbl/d, from the Bakken play to refining and pipeline hubs in Illinois
As discussed in-depth here, DAPL’s capacity is supportive for Bakken oil-price differentials. If oil production grows at all in the Bakken (including the return of shut-in production), DAPL’s absence would likely require some crude-by-rail solutions to dispose of excess crude. The result would likely be weaker in-basin pricing, and weaker pricing at Clearbrook and Guernsey as oil is pushed into other markets.