• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 6 days They pay YOU to TAKE Natural Gas
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 3 days What fool thought this was a good idea...
  • 6 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 1 day A question...
  • 12 days The United States produced more crude oil than any nation, at any time.
North Korean-Iranian Military Cooperation Raises Alarm in the West

North Korean-Iranian Military Cooperation Raises Alarm in the West

Increased military cooperation between North…

Oil Prices Climb As Cushing Oil Stocks Near Historic Lows

The amount of crude oil in the Cushing, Oklahoma, hub has fallen to 22 million barrels, which is dangerously close to the minimum operating level, prompting worry about quality and the possibility of the stocks falling below the minimum level.

Oil inventories at Cushing have fallen from a two-year high of 43 million barrels in June to less than 22 million barrels, according to the American Petroleum Institute, as of last week.

The substantial decline was the result of higher demand from refiners, Reuters reported, and equally higher export demand.

"Cushing inventory levels that are flirting near historical lows are driving WTI prices higher in an already tight market," Vortexa analyst Rohit Rathod told Reuters.

The state of inventories at Cushing could become one more factor in support of higher oil prices, not least because at a level of 22 million barrels, the oil still available at Cushing becomes difficult to pump out. The storage hub has a capacity of 98 million barrels.

"If you let the crude (level) drop too low, the crude can get sludgy and you can't get it out. What does come out - you won't be able to use," Wood Mackenzie sales director Carl Larry told Reuters.

Stocks at Cushing may yet inch up during refinery maintenance season but not everyone agrees that it would be enough to make it usable again: refiners may opt for a shorter maintenance season amid still strong fuel demand.

The decline in refinery inputs during maintenance season is seen at 1.8 million barrels daily, compared with 1.5 million bpd this time last year.

If the inventory level does not rise meaningfully, however, this would have an additional bullish impact on prices, pushing WTI closer to $100 per barrel.

Nine years ago, inventories at Cushing fell below 20 million barrels but that was before the United States became a major oil and fuel exporter, so stocks were replenished quickly.


By Charles Kennedy for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment
  • George Doolittle on September 27 2023 said:
    Equity prices of all coal names soaring today so certainly a massive industrial boom "stock play" remains intact big time. Long Methanex strong buy

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News