Oil prices didn’t fall much…
Oil prices were down early…
The United States expanded its oil storage capacity by 34 million barrels, or six percent, from September 2015 to March 2016, according to the Energy Information Administration’s latest report on the matter.
The addition marks the largest such capacity growth since the EIA began collecting the data in 2011, Reuters reported on Wednesday. Industry insiders had feared storage capacities would fail to keep up with the speed of American oil and gas production.
Low oil prices have led American oil reserves to swell over the course of the past two years. The 15 percent increase in fuel storage has pushed crude oil storage utilization levels to a record high of 73 percent for the week ending June 10th.
The fires in Alberta, Canada and reduced output in the United States have led crude oil stocks to decrease, spurring a price increase, albeit with limited effect.
The EIA’s report, released every six months, said the expansion of crude storage would help “accommodate the growth in U.S. crude oil inventories, which surpassed 500 million barrels at the end of January 2016.”
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Inventories of the raw product rose in 24 of the 30 weeks covered in the report, which highlights the need for larger facilities. Cushing, Oklahoma - a major energy storage facility in the United States - has been at 87 percent capacity in the past four weeks - up six percent from last year. The Gulf Coast region, surrounding the Gulf of Mexico, saw similarly high utilization rates in their storage sites.
“The largest commercial crude oil storage capacity expansions since September were in the Midwest and Gulf Coast regions, which added 19 million barrels and 13 million barrels, respectively,” the report read. “Combined, these regions account for 82 percent of total U.S. commercial crude oil storage capacity. Within the Midwest, storage capacity at Cushing, the delivery point for the Nymex WTI futures contract, expanded 1.5 million barrels.”
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…