Managementteams of major pipeline operators are bullish on crude volumes and the NGLmarket but bearish on oil prices versus the strip as Permian Basin productionkeeps supply high, Credit Suisse analysts said.

and Targa ResourcesCorp. in particular are upbeat about their NGL prospects. CreditSuisse termed Enterprise better positioned due to an expected ramp-up in ethaneexports and said the Midland Basin could account for the bulk of Targa'sPermian growth.The Sept. 28 note by John Edwards and colleagues was the product of a Houstonbus tour on which the analysts canvased seven midstream companies.

Theanalysts indicated that chronic oversupply is tamping down Enterprisemanagement's view on oil prices over the next year and a half, while Targa isless confident about its near-term distribution growth, as "managementdoesn't believe crude goes above $55 any time soon as production growth in thePermian continues to increase."

Edwardsand his team also recently met ONEOK Inc. and ONEOK Partners LP CFO Derek Reiners and Executive VicePresident Walter Hulse. The outcome of those discussions was in another report,issued Sept. 30, that highlighted management's confidence that ethane demandwill grow.

ONEOK's"ethane story is real," the Credit Suisse group wrote. "Themanagement pegs EBITDA uplift for [ONEOK Partners] from ethane recovery ~$200mmby 2019."

ONEOKPartners, which started to recover ethane during the second quarter, has seenits stock rise by more than 30% since the beginning of April. The analystspointed out that most of the ethane rejected in the U.S. can be delivered toMount Belvieu, Texas, and half of that is on ONEOK Partners' system.

Companieshave an incentive to reject ethane and keep it in the natural gas stream ifprices are not sufficient for the costs of extraction and processing. Producersare increasingly extracting ethane, given an anticipated boost in priceson the heels of growing demand for NGLs, increased petrochemical use and aroster of ethane crackers due to come online over the next few years.

'smanagement was the most bullish of all the companies Credit Suisse talked toand is particularly confident about the Delaware Basin, while is themost bearish relative to investor perception, the analysts noted in their Sept.28 report. "Management didn't expect $45/bbl to be sufficient to sustaingrowth in the Permian, but [is] now expecting flat to slight growth," theysaid of Plains.

ThePermian is expected to touch 2 million barrels per day in October, which wouldreflect the biggest oil production increase among all U.S. basins. Plains andEnterprise have been citedas among the biggest midstream beneficiaries of growing Permian crudeproduction.