Crude oil levels at Oklahoma’s Cushing Hub climbed back above 20 million barrels, according to this week’s report from the U.S. Energy Information Administration.
The Hub level had dropped to 19,614,000 barrels as of July 3 but on July 10, it stood at 20,044,000 barrels. The amount of crude oil stored in Cushing before it is shipped to Gulf Coast refineries is important. The Hub is the physical delivery point for West Texas Intermediate crude oil futures traded on NYMEX. The storage levels directly impact the futures curve structure and can cause significant price movements.
Cushing dropped to a 12-year low in late June and experts say it put the hub at being dangerously close to empty. The inventories fell by 6 million barrels to 19 million barrels. The 19 million barrels represented about 25% of the hub’s 76-million barrel working capacity.
It also created more stress on the hub, falling to the point where companies struggled to supply customers with usable oil due to pipeline and structural minimums.
The EIA reported a decline of 1.7 million barrels of crude oil inventories in the U.SA. during the week ending July 10. It brought commercial stockpiles to 409.7 million barrels which are now 6% below a five-year average for this time of the year.
