The Cushing Hub, the northern Oklahoma crude oil storage site where U.S. benchmark oil prices are determined, remains critically low, according to the most recent inventory report from the U.S. Energy Information Administration.
The report indicated the Hub, which has a normal capacity of about 73 to 75 million barrels of oil stored in its massive storage tanks surrounding the northern city of Cushing, held 21,824,000 barrels of oil as of September 4. It was a decline from the 22,508,000 barrels recorded as of August 28.
Cushing has struggled for months as crude oil is not held for storage but rather passed from other oil producing states on to Gulf Coast refineries for shipment largely to foreign countries pressed to find oil due to the shortage caused by the U.S. and Israeli war against Iran.
Throughout the month of August, the inventory fluctuated around 21 million to 22 million barrels of oil. The hub reached an extremely critical low of 18,757,000 barrels on June 19. Its high point was more than 31 million barrels recorded by the EIA as of April 3.
Cushing is critical for U.S, oil movement because it is a central crossroads and storage junction as well as the U.S. pricing anchor for the country’s petroleum network. Nearly two dozen major inbound and outbound pipelines are connected to the hub, and they have a capacity of more than 6.5 million barrels a day.
The Hub received crude oil from major oil producing regions including Western Canada, the highly productive Permian Basin, the Bakken of North Dakota and Montana and the Rockies. The crude oil from those regions are redirected to landlocked Midwest refineries and south to the Gulf Coast export terminals.
It is also what is described as a mandatory delivery location for West Texas Intermediate crude oil futures contracts traded on the New York Mercantile Exchange.
