Detailed review of pipeline capacity expansion plans and potential for truck / rail crude shipments reinforces our call from March that Permian growth will be well below consensus expectations in 2019. This adds to our broader oil price thesis, which is constructive.

The Permian underpins US supply growth - consensus sees this continuing at ~650 kb/d pa. Over the last 12 months, US oil production has grown considerably, by ~1.5 mb/d according to EIA estimates. The engine behind this was the Permian Basin, accounting for two-thirds of this growth. With roughly half the country's oil rigs and frac spreads concentrated in the Permian Basin, growth is widely expected to continue. Expectations have moderated somewhat, but estimates from a broad range of forecasters are still anchored around 650 kb/d of growth from the Permian in 2019. Read More