Skip to main content

Energy and Resources Trafigura starts shipping Permian crude on new Cactus II pipeline

Trafigura is one of the biggest exporters of U.S. crude, and routinely ships barrels overseas.

Denis Balibouse/Reuters

Global commodities trader Trafigura AG said on Monday it has started shipments of Permian basin crude to the Corpus Christi oil hub in Texas via the new Cactus II pipeline system.

Trafigura signed a long-term agreement with pipeline operator Plains All American Pipeline LP last year to transport a total of 300,000 barrels per day (bpd) of crude and condensate on the pipeline.

The company will be shipping full contractual volumes on the line, which has a capacity of 670,000 bpd.

Story continues below advertisement

The Cactus II line is likely to see flows of about 300,000 bpd through August, and is likely to be near capacity by September, market sources have estimated.

Trafigura is one of the biggest exporters of U.S. crude and routinely ships barrels overseas.

The Cactus II pipeline is the first of three large pipelines expected to start up this year from the Permian Basin, the biggest in the United States, and is expected to alleviate a bottleneck that had depressed regional prices for more than a year.

West Texas Intermediate (WTI) prices in Midland, Texas have strengthened to a premium compared with U.S. crude futures ahead of the pipeline’s startup.

On Monday, prices were seen at a premium of about 20-25 cents a barrel to futures, dealers said.

As Midland crude strengthens to a premium, traders also expect the arbitrage window to ship barrels to Cushing, Oklahoma, the delivery point for U.S. crude futures, to eventually shut.

Prices in Cushing have rallied over the past two weeks, with U.S. crude futures’ discount to Brent trading near $4 on Monday, the smallest since March 2018.

Report an error
Tickers mentioned in this story
Unchecking box will stop auto data updates
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

Cannabis pro newsletter