Rising U.S. oil consumption this year has led to crude oil inventories in Cushing, Oklahoma, dropping by as much as 42 percent so far this year, the Energy Information Administration (EIA) said on Tuesday.
In the week ending September 10, crude oil stocks at Cushing were at 32.9 million barrels, excluding pipeline fill and stocks in transit by water and rail. This level means that crude inventories at the hub, which is the crude oil delivery point for the WTI Crude futures contract, have declined by 42 percent since the beginning of 2021. Inventories are also now 26 percent lower than normal, based on the previous five-year (2016–2020) average for that time of year, the EIA said.
Storage withdrawals from Cushing, consistent with withdrawals from inventories elsewhere in the world, generally indicate that consumption exceeds production.
In June 2021, for example, stocks at Cushing fell by 35 million barrels, or by 1.2 million barrels per day (bpd). This was the largest decline in U.S. crude oil inventory, including crude oil held in the Strategic Petroleum Reserve (SPR), since the EIA began collecting this data in 1981.
Storage capacity utilization at Cushing now is at 43 percent. The last time utilization was this low was at the end of 2018, following disruptions on the Keystone Pipeline system and after the Diamond Pipeline system entered service from Cushing to Memphis, Tennessee.
U.S. inventories of crude oil and the most used refined oil products have now fallen to below the 2018 levels, energy research service HFI Research pointed out last week.
U.S. stockpiles of the so-called big 4—crude oil, gasoline, distillate, and jet fuel—are combined, below 2018 levels now, according to data compiled by HFI Research.
Low stocks of crude and fuels are a key reason why gasoline prices are not falling after the busiest driving season ended.
By Charles Kennedy for Oilprice.com
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