Permian Basin Expects a Boost From Pipelines Opening in 2019
The only thing certain about the oil industry in 2018 was the increasing dominance of the Permian Basin.
Crude oil prices hit three-year highs in the spring and dropped to a 14-month low in December. Permian Basin drillers were hobbled all year by oil and natural gas pipelines that were straining capacity. And still, oil production increased by nearly 900,000 barrels per day in 2018.
In 2019, more price uncertainty is possible, with the threat of falling demand pushing prices down and shrinking supply from Iran and other countries pushing prices up. But analysts say that 2019 is the year the Permian Basin's transportation constraints will be cleared when several massive new pipelines open for business.
The Permian Basin — already a powerful force in the energy world — could have even more influence over the world's crude oil prices. In the summer, the U.S. Energy Information Administration was projecting that Permian Basin oil production would average 3.9 million barrels per day in 2019. Now projections say it will be just short of that — 3.8 million barrels — by January.