Oil storage tanks and inventories are likely to fill up soon on the background of the fact that global crude oil supply is running around 1.5 million barrels a day above demand.
The US oil store has already hit the highest level in more than 80 years and storage inventory is equal to 70% of the national capacity.
The volume of crude oil in the main US oil storage in Cushing, which serves as a hub on the way from West Texas and Canada to the Gulf Coast refiners and is also used as a storage facility for large physical volumes that back oil futures at the New York Mercantile Exchange (NYMEX), hit 49.2 million barrels. Cushing’s inventory has sharply increased by 7.8 million barrels over the last month. If oil production continues to rise at this pace, the storage is expected to reach maximum capacity by May.
“The inventory levels are actually getting scary. When I look at storage, it does not seem to me we have enough,” said Harish Sundaresh, portfolio manager and senior commodity strategist for Loomis, Sayles & Co.
