Cushing oil crunch

Cushing, Oklahoma is a central oil storage hub.

Cushing is strategically located to pull in barrels from top U.S. shale fields and Canada , while its hundreds of tanks are tied to pipelines that supply U.S. mid-continent and southern refineries and funnel oil to Gulf Coast export ports…

Oil prices reached their highest level in over a year Thursday, after crude stocks at a key storage hub fell to their lowest since July last year.

Crude inventories in Cushing, Oklahoma fell to 22 million barrels in the fourth week of September — hovering close to the operational minimum, according to data from the U.S. Energy Information Administration (EIA). That’s a drop of 943,000 barrels compared to the prior week…

“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,” said Carl Larry, a sales director at energy consultants Wood Mackenzie…

The global oil markets are looking at a “pretty robust deficit” on top of an already significant shortfall this quarter, Malek said, citing the oil production cuts implemented by OPEC and its allies.

DB2

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And yet the United States production of crude oil is at an all time high.

Andy

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