Crude oil inventories at Cushing, Oklahoma, hit an all-time high on Tuesday 10 March 2015, surpassing the previous all-time high set in 2013, as measured by Genscape. WTI prices fell in reaction to the growing Cushing supply, posting new six-year lows. As of 15 March, WTI front month prices have fallen 55 percent in the past year with the WTI 12-month spread contango widening to the highest level since 2011.
Cushing stocks are on the rise, but significant tank storage capacity has been added to the terminal since the previously high stock levels in April 2013, making current capacity utilisation lower than that observed in 2013.
Total shell capacity has increased by 31.6 mmbbls since 2009, when Genscape started monitoring storage at Cushing, which is a total capacity increase of 38 percent. Throughout Cushing history, capacity utilisation has never exceeded 80 percent. Given today’s total capacity and the same utilisation rate, if achievable, Cushing maximum storage levels would equate to approximately 66 mmbbls. So, Genscape expects that the build at Cushing will continue for several more weeks, as long as the economic incentives to store crude there remain in the WTI price structure.