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Cushing stocks fall below 20 million bbls

Published Thursday, July 24th, 2014

The EIA reported another weekly drop in Cushing stocks by 1.5 million bbls taking them below 20 million bbls to 18.82 million bbls, the lowest level since November 2008. We must assume that the opening of the second Seaway pipeline to the Gulf Coast is to blame. The result was a 73cts/bbl closing gain in the WTI price and jump in the Sept/Oct spread of 31cts/bbls to +$1.47/bbl. There is now upwards of 60 million bbls of unused storage capacity at Cushing!

There are a wide range of estimates as to what are minimum operating levels at Cushing and a cloud of mystery as to just how much of the oil stored there can be delivered into the WTI contract. Locals probably have all the information but the wider market does not, leading to a very uneven playing field. NYMEX as the “owner” of the contract could help by clarifying these issues.

Nationwide crude stocks fell by 4 million bbls, 2.9 million bbls of which were in PADDs 2 and 3 but overall they are 2% above last year’s level and 3% above the five-year average. Gasoline built 3.4 million bbls and distillates 1.6 million. Total commercial stocks built 5.2 million bbls and are 1% and 2% above the one and five-year averages.

to read the rest of the report, please click here 

Posted by David Hufton