Tags: oil | gasoline | Cushing | storage

Biggest Oil Hub Seen With 12 Million Barrels of Space Left

Tuesday, 07 Apr 2015 04:55 PM

Tanks at America’s biggest oil-storage hub are nearing capacity, with 12 million barrels of space remaining, according to Societe Generale SA.

Weekly inventory gains at Cushing, Oklahoma, averaged 2.43 million barrels in March and 83 percent of storage at the hub is now being used, Mike Wittner, head of oil market research at Societe Generale, said by phone from New York. Tank farms elsewhere in the U.S. are less constrained, with 169.5 million barrels of space left nationally, he said Tuesday.

Traders are shoving the most oil in 85 years into storage after a supply glut dragged U.S. crude for May delivery almost $10 a barrel below contracts a year out. Analysts including the International Energy Agency have forecast that the stockpiling will test U.S. storage limits, putting pressure on oil prices.

“The 12 million barrels, just in absolute terms, is the most striking number because we’ve seen plenty of 2 million- barrel or more builds,” Wittner said. “If we get some more big builds at Cushing, we should see more downward pressure on WTI.”

U.S. benchmark West Texas Intermediate crude gained $1.84, or 3.5 percent, on Tuesday to settle at $53.98 a barrel on the New York Mercantile Exchange.

While supplies have continued to swell, U.S. oil production is “showing signs of flattening,” SocGen commodity analysts including Mark Keenan said in a report on Tuesday. Total output fell for the first time in eight weeks to 9.39 million barrels a day, according to U.S. Energy Information Administration data for the week ended March 27.

U.S. oil product demand is also rising, up 7 percent from a year ago, and refineries restarting after seasonal maintenance will chip away at domestic crude inventories. Goldman Sachs Group Inc. said in a report on Monday that oil inventories will peak in April.

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Tanks at America's biggest oil-storage hub are nearing capacity, with 12 million barrels of space remaining, according to Societe Generale.
oil, gasoline, Cushing, storage
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2015-55-07
Tuesday, 07 Apr 2015 04:55 PM
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