New pipelines in the Permian Basin should have enough capacity to “accommodate” rising oil production in the Permian Basin, the U.S. Energy Information Administration said in a report Tuesday.
A lack of infrastructure between West Texas and refineries along the Gulf Coast., had at one point caused the crude in Midland to sell at a $15 a barrel discount to crude moving through the pipeline hub in Cushing, Okla, the agency said.
But that shortfall, ” is unlikely to be either as large or as persistent as it was following the rapid increase in Permian production from 2010 to 2014,” EIA said. “As crude oil production in the Permian Basin of western Texas and eastern New Mexico has increased, pipeline infrastructure has also increased to deliver this crude oil to demand centers on the U.S. Gulf Coast.”
Since 2010, oil production in the Permian has more than doubled to more than 2 million barrels a day,
To read EIA’s report, click here.