Hi-Crush Inc (fka HCRSQ)

[56Chevy]

Permian basin crude although arguably the best and largest resource in the US and possibly even in the world has been selling at a discount to the WTI price's we see every day. Why? They can get it out of the ground no problem but are limited because of a shortage in pipeline capacities to the refineries in south Texas or over to Cushing, OK. The pipelines (or the lack of) are a choke point and because of that Permian oil producers have to sell the oil at a discount. How much of a discount? It's gone as high as $18 @ bbl but I think currently that has been reduced to $11.

Todays price for WTI is $47.96 @ bbl which means Permian producers are only getting in the neighborhood of $36 ~ $40 @ bbl.
With prices like that nobody is calling for proppant sand. Its cheaper to drill but not frac the well. No fracking means no demand for sand no matter who is selling it.

The good news is there are a couple large pipeline projects that were started in late 2017 early 2018 that will be completed in 2019.

Marker:
Hi-Crush Partners LP (HCLP)
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