Black Wax

Uinta crude producers and midstream operators are developing new routes to market for the distinctive black and yellow crudes that are hard to ship long distance because of their waxy composition. Rail transload terminals have recently been developed. Uinta crudes are currently discounted by about $15/Bbl to West Texas Intermediate (WTI) because of transport constraints. Today we review market pricing for Uinta Basin crudes.

Rising Uinta crude production will run into a refining capacity ceiling unless new routes to market are developed. The distinctive black and yellow waxy crudes produced in Utah are largely refined locally in Salt Lake City refineries because of the challenges transporting them. However new refineries, rail load terminals and even a heated pipeline are all being planned to increase takeaway capacity to absorb growing production. Today we continue our analysis of Uinta Basin crudes.