LONDON (Bloomberg) - American pipeline operators have begun asking
oil producers to voluntarily ratchet back their output in the clearest
sign yet that a growing glut of crude is overwhelming storage capacity.
Plains All American Pipeline LP, one of the biggest shippers of crude
in the U.S., sent a letter this week asking its suppliers to scale back
production. The notice came from the company’s marketing unit that buys
and sells oil to customers. A Texas oil regulator said Saturday that
drillers were getting similar notices from pipeline operators.
The messages signal the oil market is fast approaching the moment
traders have been warning about -- when crude supplies overflow storage
tanks and pipelines as the coronavirus pandemic drags down oil demand by
the most in history.
“We are sending this proactive request to our suppliers to ask that
you take steps to reduce oil production in response to the pandemic,”
Houston-based Plains said in the letter obtained by Bloomberg.
https://www.worldoil.com//news/2020/3/30/pipelines-ask-us-drillers-to-slow-output-as-storage-capacity-dwindles?id=31307113
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