US oil storage is once again approaching capacity

Author: Eamonn Sheridan | Category: News

Inventories at Cushing are just over 80% of capacity 

The supply glut reasons are familiar from earlier in the year, mainly surrounding demend destruction due to lockdown measures, although, at this stage a return to negative prices appears unlikely.

Wood Mackenzie:
  • Refineries are coming back online ...  “Even as those facilities come back online, we are seeing excess inflows into Cushing overshadowing increased demand” 

Adds Bloomberg:
  • The structure of oil’s so-called futures curve has also motivated traders to store barrels. WTI has been in contango, when nearer-dated contracts are at a discount to later-dated ones. That means that, if the gap is wide enough, traders can make a profit by storing crude to sell it at a higher price later, when the glut eases. 

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