The cancellation of Enterprise Products Partners’ Echo 4 oil pipeline from the Permian to Houston is further evidence of the latest glut in pipeline capacity out of the West Texas basin. An indication of how much spare capacity is available because of weak demand is that Enterprise said it reached a deal with customers who had agreed to ship 450,000 B/D of oil over the line that allows them to move less crude over other Enterprise pipelines in exchange for longer-term deals. Other pipeline companies with growth plans are in a similar position but so far have postponed projects rather than killing them. “Permian oil infrastructure is already overbuilt. We anticipate that Permian oil output will recover to pre-COVID records of 4.9 million B/D by the end of the next year, but, even then, we will have 2 million B/D of unutilized outbound capacity,” said Artem Abramov, head of […]