Posted on 02/13/2015 4:50:48 AM PST by thackney
About half the surplus crude accumulating in tanks across the United States is flowing into Cushing. If the build-up continues at the same rate, some industry officials and sources said, the tanks could reach maximum capacity by early April....
Traders have been scrambling to secure space at Cushing so they can store oil purchased at current low prices and sell it in a year at a profit exceeding $11 a barrel because the oil market has been in a structure known as contango.
In January, crude oil arriving by pipeline and rail into Cushing, the delivery point of the U.S. crude futures contract, jumped nearly 11 million barrels to nearly 42.6 million barrels, the largest monthly build since the U.S. Energy Information Administration began tracking the data a decade ago.
On Thursday, data from energy information provider Genscape showed Cushing stocks rose a further 3.2 million barrels in the four days to Feb. 10, the biggest such increase ever.
Over the past 10 weeks, some 550,000 barrels per day (bpd) of crude have flowed into oil tanks across the United States, according to the EIA. That's approximately one-quarter of the current global surplus estimated by OPEC.
...The excess oil will spill over into the wider market, further pressuring global prices that have recently stabilized following a seven-month dive.
The build-up in Cushing has made demand look more robust than it actually is, artificially supporting prices, say traders.
"Once it's full, the market will puke," said one trader...
The swelling of tanks is a reversal from seven months ago, when oil was flowing out of Cushing to sate thirsty refiners on the Gulf Coast, and traders were attempting to gauge tank bottoms rather than tank tops. In July, Cushing inventories fell below 18 million barrels, the lowest value in six years.
(Excerpt) Read more at reuters.com ...
Sounds like a false dawn for Brent crude.
The last time I read, the US didn’t have nearly enough storage space for strategic reserves. Has anyone built any?
Bigger impact to WTI trading than Brent...
Near me local pump prices are up over 30 cents a gallon in the last 2 weeks.
That’s well over a 15% jump.
The US Strategic Petroleum Reserves is separate from commercial/private storage.
The US SPR is 95% full.
I remember before that there was a story about storing oil off shore in tankers.
I never followed up on it but I do watch the market sometimes.
and it the price doesn't go up as much as they expect, how much $$$$$ will they lose in storage costs???
Why the vast differential? Wouldn't competition between domestic users for WTI narrow the gap significantly?
Is that 10-day supply for National purposes or our Defense use?
Pipeline bottleneck getting oil out of Cushing. That capacity is maxed out now at current use.
Actually it is a one day supply!
same here in north east FL. They take time to go down but sure as hell they jump up quick on the prices.
That number is total liquid fuels, including Natural Gas Liquids, etc.
Refined product from Crude Oil is 16.6~17.2 MMBPD.
http://www.eia.gov/dnav/pet/pet_cons_psup_dc_nus_mbblpd_m.htm
“....... the US didn’t have nearly enough storage space for strategic reserves. Has anyone built any?”..
The “storage” is underground in the wells, exactly where odumbo wants it to remain.
“....... the US didn’t have nearly enough storage space for strategic reserves. Has anyone built any?”..
The “storage” is underground in the wells, exactly where odumbo wants it to remain.
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