RE:Cushing Running Dry: JPMgeezer21 wrote: PM: "
In a note predicting the near-term dynamics of the oil market, JPMorgan's commodity Natasha Kaneva writes that in a world of pervasive nat gas and coal shortages which are forcing the power sector to increasingly turn to oil (boosting demand by 750bkd during winter and drawing inventory by 2.1mmb/d in Nov and Dec), Cushing oil storage - which just dropped to 31.2mm barrels, the lowest since 2018...
... may be just weeks from being "effectively out of crude." The bank's conclusion: "if nothing were to change in the Cushing balance over the next two months, we might expect front WTI spreads to spike to record highs—a “super backwardation” scenario."
Someone at JPM is spending too much time inhaling the vapours and inventing new words for the stock market structure. That chart appears purposefully skewed to bottom out at 20K?!? If their intent is to get attention to get Keystone restarted then best of luck.
There's a couple of factors in the last year which has affected how the EIA manages the Cushing, Okla storage hub. One was that the facility had near full crude storage and wasn't able to take advantage of the bottoming out of barrel prices. The other was the "East Coast Incident". That very easily explains the fluctuations.
Fluctuations around the world as far as Europe being forced to approve a pipeline to Russia and the Saudis getting into a price war because OPEC+ and OPEC hate each other is just typical world pricing influence.
There is very not much fluctuation in the Cushing storage inventory and they very recently had above average increases. The
Energy Information Administration reported just a few weeks ago that U.S. crude inventories rose by 2.3 million barrels for the week ended Oct. 1. That was above the average 200,000 barrel increase expected. The EIA also reported a weekly inventory increase of 3.3 million barrels for gasoline, while distillate stockpiles edged down by 400,000 barrels. The EIA data also showed crude stocks at the Cushing storage had edged up by 1.5 million barrels for the week.
They seem to be following the world market price for adding or reducing inventory and even may have some influence as to the future's market. What's ironic is that speculation prices can often be based on the Cushing inventory.