Texas Cold shuts down some Permian oil wells as ice disrupts trucking

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The extreme cold that has hit Texas is prompting some Permian Basin oil producers to shut down a small portion of production as icy roads disrupt critical trucking operations.

A large Permian driller had around 4,000 barrels of crude production per day halted due to weather conditions, according to a person familiar with the situation, who asked not to be named as she is not authorized to discuss it publicly . The closures were partly due to the impact of weather on the wells and partly due to a lack of trucks to collect crude, the person said.

Another company that expected to receive about 25,000 barrels of oil by truck on February 2 has not seen those deliveries and does not expect to see deliveries again on February 3, another person said. Many drillers use trucks to collect crude from wells before it is shipped by pipeline from a distribution center.

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While most oil from Permian operations is collected by pipeline and the disruptions so far appear small and localized, they come at a time when shortages have emerged in several major producing nations and are helping to keep crude at low levels. seven-year highs. Record production in the world’s most prolific shale sector was not enough to allay concerns about a tight global market, leading some Wall Street banks to forecast oil prices of $100 a barrel later. This year.

Sub-zero temperatures in Texas have also impacted operations at natural gas processing plants, people familiar with the situation said. Earlier, the El Paso Natural Gas pipeline informed customers that it was experiencing a loss of supply in the Permian due to winter and freezing conditions.

Most crude production wells generate a certain volume of gas, so if gas facilities are hit by extreme cold and are unable to supply, some oil producers may be forced to shut down wells.

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