Would love to get a discussion going among physical (and financial) oil traders about the current trading environment around the Texas/Oklahoma Triangle.
Spreads are beginning to blow out on the production forecasts and fundamentals in the Permian as Cushing drew through the first quarter. Looking to get some discussion on current constraints going forward, whether its MEH storage and shipping throughput or whether international demand will be enough to absorb all the Permian can produce. We have already seen the Brent/WTI spread whipsaw from $6 to $3 and now back to $5 as the transport spreads between MEH and MID are pricing in rail to the coast. How does this all end, and what is the next constraint to hit? What do new pipes going to Corpus imply about pricing - will be at a premium or discount to Houston? Does ship size really matter or will the holders of the export capacity be the only ones to really take this arb?