North American Storage and Transportation Trends · • Cushing storage levels have increased at an...

www.genscape.com | © 2016 Genscape Incorporated. All rights reserved.

North American Storage and Transportation Trends

Brian BuschDirector, Oil Markets and Business Development

© 2015, Genscape Incorporated. All rights reserved.Current State of North American Storage2

What we do

Genscape: How do they do it?

Genscape uses thermal and visual imagery to measure storage volumes.

Genscape provides measured data on pipeline flows.

Genscape monitors activity at refineries to detect shutdowns, upsets, and flaring.

Genscape Vesseltrackermonitors vessel movements around the globe.

Monitoring Stats – North America

Crude Oil Storage 342 mn bbls, weekly~1900 tanks/week

Crude Oil Pipeline 12.5 mn bpd, 2x/hr50 pipelines

Crude by Rail 2 mn bpd loading, daily1.7 mn bpd unloading, daily

Refineries 13.6 mn bpd, 12x/hr (76% US)470+ units

Product Tanks(Gasoline, Jet, Diesel, Ethanol)

65 mn bbls, weekly~800 tanks

NGL Processing 59 units, 12x/hr

NGL Pipeline 2 mn bpd, 2x/hr

Monitoring Stats – Europe

Crude Oil Storage 342 mn bbls, weekly~200 tanks/week

Crude Oil Pipeline Forties Supply Chain

Refineries 5.1 mn bpd, 12x/hr120+ units

BegiumCzech RepublicEnglandFranceGermanyNetherlandsScotlandSpain

Product Tanks(Gasoil, Jet)

10.7mn MT, weekly~800 tanks

© 2015, Genscape Incorporated. All rights reserved.Current State of North American Storage6

Cushing – A History and a Look Forward

Cushing, OK

Genscape vs EIA Storage Methodology

-10,000,000

-8,000,000

-6,000,000

-4,000,000

-2,000,000

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Bar

rels

Monthly Cushing Stocks Change Comparison

EIA Change Genscape Change

© 2016, Genscape Incorporated. All rights reserved.9

A Blast from the Past – Feb 2015


Cushing Storage

• Added ~4.4mn bbls capacity since April 2015

• Highest utilization and storage level on May 13, 2016: • 80.64%, 70.945mn

bbls

04/14/15, 65.08

05/13/16, 80.64%

0%

20%

40%

60%

80%

100%

0

10

20

30

40

50

60

70

80

90

100

Feb-

10M

ay-1

0Au

g-10

Nov

-10

Feb-

11M

ay-1

1Au

g-11

Nov

-11

Feb-

12M

ay-1

2Au

g-12

Nov

-12

Feb-

13M

ay-1

3Au

g-13

Nov

-13

Feb-

14M

ay-1

4Au

g-14

Nov

-14

Feb-

15M

ay-1

5Au

g-15

Nov

-15

Feb-

16M

ay-1

6Au

g-16

mn

bbls

Cushing Storage Cushing Capacity Cushing Capacity Utilization


WTI Term Structure

20.00

25.00

30.00

35.00

40.00

45.00

50.00

55.00

60.00

WTI

Jan-16 May-16 Aug-16

Price, Trends, Technicals and Fundamentals


Total Cushing Storage Expansion Since 2009

0

2

4

6

8

10

12

14

mn

bbls


Cushing Connected Pipeline Capacity Changes

Genscape MonitoringTotal: 91%Outgoing: 86%Incoming: 95%

-400

0

400

800

1,200

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2012 2013 2014 2015 2016 2017

Mbp

d


Cushing Incoming Pipeline Capacity

0

0.5

1

1.5

2

2.5

3

3.5

2013 2014 2015 2016

mn

bpd

PipelineCapacity (bpd)

2014Pony Express 230,000

Centurion South Reversal 60,000Flanagan South 600,000White Cliffs Twin 74,000

2015

Pony Express Expansion 90,000Magellan SCOOP 70,000

2016White Cliffs Expansion 65,000


Cushing Outgoing Pipeline Capacity

PipelineCapacity (bpd)

2013

Seaway Expansion 250,0002014

TransCanada Gulf Coast 700,000Centurion South Reversal -60,000

2015

Seaway Twin 450,000

0

0.5

1

1.5

2

2.5

3

2013 2014 2015 2016

mn

bpd


Cushing Connected Pipeline Utilization

30%

40%

50%

60%

70%

80%

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16

Incoming Utilization Outgoing Utilization


How fast could the glut empty?

• Cushing storage levels have increased at an average rate of 40,000 bpd since Oct. 2015

• Empty storage space on Cushing to Gulf Pipelines is 500,000-600,000 bpd

• Cushing could drain about 3.5mn bbls/week to minimums in ~4 months

• Cushing drained an average 1.25mn bbls/week in 2013 when Seaway was fully reversed

0

10

20

30

40

50

60

70

80

Apr

-15

May

-15

Jun-

15Ju

l-15

Aug-

15

Sep-

15O

ct-1

5

Nov

-15

Dec

-15

Jan-

16

Feb-

16M

ar-1

6

Apr

-16

May

-16

Jun-

16Ju

l-16

Aug-

16

Sep-

16O

ct-1

6

Nov

-16

mn

bbls

Cushing Storage Projected Storage

© 2016, Genscape Incorporated. All rights reserved.19 © 2015, Genscape Incorporated. All rights reserved.Current State of North American Storage19

North American Production


Oil Rigs Have Increased +96 Since Reaching Bottom at 323 in Mid-May

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

No.

of R

igs

Oil Rig Forecast

7/29/2016 Fcst Actuals

Bottomed at 323 in Mid-May

Source: Spring Rock as of 7/29 Main Forecast

96 Rigs added Since Mid-May, Expect another 103 to be added by year-end


U.S. Crude Oil Production Is Declining, But Will Start to Grow Again Mid-2017

128 173

841980

1288

649

-586

-280

-1,000

-500

0

500

1,000

1,500

2010 2011 2012 2013 2014 2015 2016 2017

Mb/

d

Year on Year Change

U.S.

Source: Spring Rock

-

2,000

4,000

6,000

8,000

10,000

12,000

Mb/

d

U.S. Production Forecast

Total US Fcst as of 7/29/2016

Production Peaked in April at 9.6 MMb/d

Set to decline to 8.4 MMb/d by mid 2017


Canadian Supply Forecast Revised Down, But Still Expecting Growth From Oil Sands

Short term conventional forecast downward revision alongside significant oil sands permit pushbacks

0

1,000

2,000

3,000

4,000

5,000

6,000Current forecast vs. 08/01/2014

Bitumen SCO Heavy Light+Med Cond Prev (08/01/2014)

Mb/

d

2016+21 Mb/d

2017+268 Mb/d

Source: Spring Rock


0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Can

adia

n ex

ports

to U

S (M

b/d)

WC Exports vs. Takeaway Capacity

Heavy Int/Light Eff. Pipeline Takeaway Capacity

Where is the crude going: Imports into U.S.

- Pipes will start to fill even with decline in conventional production

- Given our supply forecast, rail will be needed in late 2018 unless ENB has means to increase throughput

- Rail will likely be priced into differentials as market becomes tighter

ENB Clipper Exp (+230 Mb/d)


PADD 3 and Total US Crude Stocks?


PADD 3 Storage

• Genscape monitors ~55% PADD 3 Capacity

• LOOP = 67-69mn bbls capacity

0

20

40

60

80

100

120

140

Jul 2015 Sep 2015 Nov 2015 Jan 2016 Apr 2016 Jun 2016 Aug 2016

mn

bbls

St. James Texas Gulf Coast West Texas


PADD 3 Capacity Growth

0

10

20

30

40

50

60

70

80

90

2014

2015

2016

2017

2014

2015

2016

2017

2014

2015

2016

2017

2014

2015

2016

2017

2014

2015

2016

2017

Beaumont-Nederland

Corpus Christi Houston Midland-Basin St. James

mn

bbls

Existing Projected

0

50

100

150

200

250

2014 2015 2016 2017

mn

bbls

Existing Projected


US Storage

68.11% 66.68%62.89% 63.61%

60.27%63.83%

73.93%

60.89%65.47%

0%

10%

20%

30%

40%

50%

60%

70%

80%

PADD 1 PADD 2 PADD 3 PADD 4 PADD 5 US

Capacity Utilization*Aug. 5, 2016

EIA Utilization Aug 5 Genscape Utilization Aug 5

2.035

45.7642

78.0182

3.9058 19.034

Available Capacity*Adjusted for pipeline fill, assumes 80%

utilization limitAug. 5, 2016

PADD 1PADD 2PADD 3PADD 4PADD 5


US Year Over Year Total Crude Stocks

300

350

400

450

500

550

600

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

2009 2010 2011 2012 2013 2014 2015 2016


Price Effect of Excess Supply

7/30/2014, $100.27

$-

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

2010 2011 2012 2013 2014 2015 2016

NYMEX Light Sweet Crude Oil (WTI) Futures Electronic

(Front Month)

7/25/2014, 8.443

0

2

4

6

8

10

12

2010 2011 2012 2013 2014 2015 2016

mn

bpd

EIA Crude Oil Production Domestic Production

29.5

30

30.5

31

31.5

32

32.5

33

33.5

2012 2013 2014 2015 2016 2017

Crude Oil Production, OPEC Total


Cushing Year Over Year Crude Stocks

0

10

20

30

40

50

60

70

80

1 2 3 4 5 6 7 8 9 10111213141516171819202122232425262728293031323334353637383940414243444546474849505152

2009 2010 2011 2012 2013 2014 2015 2016


US Exports

2

4

6

8

10

12

9 10 11 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7

2014 2015 2016

mn

bbls

Western Europe

United Kingdom

South America

Mediterranean

East Asia

Caribbean

Canadian East Coast


It’s Not Just Crude Stocks Setting Records


R


Gasoline Stocks Year over Year

5

10

15

20

25

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51

mn

bbls

Genscape NYH Stocks

2013 2014 2015 2016

190

200

210

220

230

240

250

260

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52

mn

bbls

EIA Total Motor Gasoline Stocks

2011 2012 2013

2014 2015 2016


US Total Crude and Products Year Over Year

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53

mn

bbls

2011

2012

2013

2014

2015

2016

[email protected]

US: +1 502 583 3435

EU: +31 20 524 4089


Brian BuschDirector, Oil Markets and Business [email protected]

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North American Storage and Transportation Trends · • Cushing storage levels have increased at an...

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