Executive Summary: Rigs: The total US rig count decreased by 14 during the week of April 20 to 558. Infrastructure: The Permian Basin continues to show growth potential, but the market is entering a more measured phase. Storage: East Daley expects a 0.9 MMbbl withdrawal from commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending April May 2.
Rigs:
The total US rig count decreased by 14 during the week of April 20 to 558. Liquids-driven basins decreased by 10 W-o-W from 464 to 454.
- Permian-Delaware (-5): Occidental Petroleum, Exxon, Coterra Energy, ConocoPhillips, Chevron
- Anadarko (-2): Gran Mesa Operating Co., Berexco, LLC
- DJ (-1): Industrial Gas Services Inc
- Eagle Ford (-1): T-C Oil Company, LLC
- Uinta (-1): Wesco Operating
Infrastructure:
The Permian Basin continues to show growth potential, but the market is entering a more measured phase. In our base case scenario, East Daley expects slower growth than in past years, but still with upside — especially for natural gas production.
Gas-to-oil ratios (GOR) in the Permian have been climbing steadily over the last several years, supporting our optimism on gas supply. As wells age and operators shift their development strategies, more gas is coming out with the oil, particularly in the Midland Basin.
However, lower WTI prices near $60/bbl are starting to influence operator behavior. For example, Matador Resources (MTDR) said last week it would drop a rig and trim $100MM from its 2025 drilling budget. East Daley expects similar announcements ahead as producers start walking back their 2025 guidance. We don’t expect a collapse by any means, but a more cautious outlook where operators adjust rig counts and capital plans at the margin.
That said, midstream companies are still feeling optimistic. Most of the big names, like Targa (TRGP) and Enterprise (EPD), have kept their guidance intact. Their confidence is tied to new processing plants coming online and a backlog of wells expected to be turned in line in 2H25.
Regarding price signals, there’s a general view that WTI in the $50/bbl range keeps the Permian in “maintenance mode.” If prices drop closer to the low $50s, we’d likely see production fall off, especially from smaller operators running 2 or fewer rigs. Those companies tend to be more sensitive to price swings and could start cutting back quickly. Rising GORs will still support gas production, but overall we’d likely see a pullback.
The second half of 2025 will be key. Drilled but uncompleted wells provide a lot of potential, but we’ll need to see how many are brought online. Our Permian Production Scenario Tool is built to adjust with the market or plug in your own assumptions — whether rig counts, pricing or well connection timing — to see how production might change in real time. With so much in flux, it’s a practical way to stay ahead of the curve and test how different outcomes could impact the basin’s trajectory
Storage:
East Daley expects a 0.9 MMbbl withdrawal from commercial and Strategic Petroleum Reserve (SPR) inventories for the week ending April May 2. We expect total US stocks, including the SPR, will close at 838 MMbbl.
The US natural gas pipeline sample, a proxy for change in oil production, decreased 0.3% W-o-W across all liquids-focused basins. Samples increased 13.74% in the Gulf of Mexico and 1.45% in the Permian Basin and decreased 3.8% in the Eagle Ford and 1.95% in the Williston Basin. The Rockies and Gulf of Mexico have a high correlation between gas volumes and crude oil volumes, whereas the Permian and Eagle Ford basins correlation is less than 45%.
We expect US crude production to be 13.46 MMb/d. According to US bill of lading data, US crude imports increased to 6.9 MMb/d. More than 60% of the supply originated from Canadian pipelines and vessels into the US, with the remainder largely coming from vessels carrying crude from Mexico and Argentina.
As of May 2, there was ~683 Mb/d of refining capacity offline, including downtime for planned and unplanned maintenance. EDA expects gross crude input into refineries to increase, coming in at 16.5 MMb/d.
Vessel traffic monitored by EDA along the Gulf Coast stayed flat W-o-W. There were 25 vessels loaded for the week ending May 3 and 25 the prior week. EDA expects US exports to be 4.2 MMb/d.
The SPR awarded contracts for 6.0 MMbbl to be delivered to Choctaw February –May 2025 and 2.4 MMbbl to be delivered to Bryan Mound April – May 2025. The SPR has 399 MMbbl in storage as of May 2, 2025.
Regulatory and Tariffs:
Presented by ARBO
Tariffs:
Seaway Crude Pipeline Company LLC The temporary volume incentive rates were extended through May 31, 2025. FERC No 2.96.0 IS25-302 Effective May 1, 2025.
Marketlink, LLC The actual temporary volume incentive rates were decreased and extended through May 31, 2025. FERC No 2.73.0 IS25-300 Effective May 1, 2025.
The above information is provided by ARBO’s Oil Pipeline Tariff Monitor. For more information on regulatory proceedings or tariff rates, please contact please contact Corey Brill via email at corey@goarbo.com or phone at 202-505-5296. https://www.goarbo.com/
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