The rebalancing of the mid-west continued as the Pegasus pipeline remains shut for over two weeks. The crude oil spreads in the region are starting to change as inventories in Cushing are starting to build (see the enlarged graph here). One of the main results of the shutdown of Pegasus has been a diversion of some of the flow of Canada crude oil via Keystone away from Patoka to Cushing.
Genscape reports Canadian oil flow to Patoka decreased by 22.9 mbpd this week (versus the previous week) or a 5.9 percent decline while Canadian crude oil flow on Keystone into Cushing increased by 57.5 mbpd on a week to week comparison or 41 percent based on our in the field pipeline monitoring instrument network. The rebalancing is resulting in Cushing storage moving back into an inventory building pattern after spending several months destocking.
For the week ending Apr 12, three of the four storage facilities from our Crude Oil Fundamental Report showed a build in inventories with Cushing building by 1.11 mn barrels while Patoka stocks declined by 0.786 mn barrels as oil is diverted from Patoka. The inventory build in West Texas and Hardisty was relatively minor (under 30,000 barrels) as oil is diverted from Patoka to compensate for the Pegasus shutdown. Should be another interesting week for oil.