Crude oil inventories at the Cushing storage facility in Oklahoma are approaching high levels seen in April when limited storage capacity amid collapsing demand contributed to the fall in WTI crude prices in negative territory. Cushing is the designated delivery point for NYMEX crude oil futures, and the rapid decline in available capacity spooked the oil market in late April and early May.
Cushing trading stocks rose to 61.6 million barrels in the week to November 13, according to the latest data from the Energy Information Administration (EIA) weekly oil report. This represents an increase from 60.4 million barrels in inventory at the hub at the end of the previous week, and a 39.3% jump from the same week in 2019 when inventories at Cushing stood at 44.2 million barrels.
The current stock at Cushing means the hub is full to about 81% of its 76 million barrel capacity, according to Bloomberg. estimates.
For comparison, during the first week of May at Cushing’s peak inventories this year, commercial crude oil inventories at the site exceeded 65 million barrels, which was 83 percent of the site’s working capacity, according to EIA data. Between the start of May and the last week of June, crude oil inventories at the storage facility had fallen to 45.6 million barrels, but they started to rise again in July, according to weekly data from the EIA. watch.
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Analysts don’t expect a repeat of the negative oil price in April as trading and clearing houses limit the bets of retail traders after the crash, while oil exchange-traded funds (ETFs) spread the risks by limiting the stacking of contracts forward. month month.
Even without a further fall in prices due to storage limits, the near-term outlook for oil demand in the United States is not optimistic as some states revert to re-imposing restrictions and curfews as cases arise. of COVID-19 are skyrocketing.
By Tsvetana Paraskova for OilUSD
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