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Vet67to82 (< 20)

Crude report for 2/18/2009 ( 1 )

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140

February 14, 2009 – Comments (2) | RELATED TICKERS: DXO.DL.DL2 , UCO , USO


The available storage at Cushing, Ok is estimated at 42 million barrels (bbls). However, the 5 year storage average at Cushing is about 20 million bbls, with last year at approx 16 million bbls.  Cushing is now UP to 34,916,000 bbls for 2/6/2009.  Compare the averages to last weeks estimated high of 36 million bbls. Look at the US EIA chart and numbers for storage at Cushing. Especially, the last quarter of 2008 and Q1 2009 .. the red dots look like a F18 going vertical:

http://tonto.eia.doe.gov/dnav/pet/hist/w_epc0_sax_ycuok_mbblw.htm

Note the US EIA definition: "Working storage capacity is the difference in volume between the maximum safe fill capacity and tank bottoms."

Note also the US EIA definition: "Product stocks include those domestic and Customs-cleared foreign stocks held at, or in transit to, refineries and bulk terminals, and stocks in pipelines. Stocks held at natural gas processing plants are included in "Other Oils" and in totals. All stock levels are as of the end of the period. Crude oil stocks include those domestic and Customs-cleared foreign crude oil stocks held at refineries, in pipelines, in lease tanks, and in transit to refineries. Distillate fuel oil stocks located in the "Northeast Heating Oil Reserve" are not included. "

The big question is, of the max capacity at Cushing, how much is really functional storage?

  80%      90%     IDK* %      

 The second question is will Cushing test the storage limit possibly inviting an environmental catastrophy?


  see also:   Shipping used for Storage - ( 1 )

* IDK = I don't know, but if I keep filling the tanks ... we'll find out  

 

Related Tickers : DXO, UCO, USO, DIG,

                          BP, COP, CVX, MRO, TSO,  XOM, RDS.A

                          COG, SD, WES, CHK

                          DHT,  FRO, NAT,  SFL, VLCCF

                          NS, NSH, ENB,  VLO

2 Comments – Post Your Own

#1) On February 14, 2009 at 6:49 PM, DemonDoug (82.62) wrote:

um, help me out here - does that mean there is more oil at cushing than average, or less oil there than average?

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#2) On February 14, 2009 at 7:54 PM, Vet67to82 (< 20) wrote:

There is more crude at Cushing, OK than normal, but there is LESS SUPPLY.  I am confident in concluding the increasing crude inventory in Cushing is near it's limit.  I expect domestic WTI production will have to be SHUT DOWN 'cuz the contango players are using ALL available storage to store WTI (collateral) against the futures they've sold. 

 Add the WTI shutdown  to the OPEC supply reductions and the crude pricing picture is UP -- not down. 

  Also, many people are noticing the US EIA reported supply increases and complaining about the prices increasing at the pump.  The consumers can't help but wonder -- what's up?  

  Cushing is the pipeline hub for the USA.  The next question I am already working on, is:  Can the refineries bypass Cushing to get the necessary feedstocks, or, after expending the supply in their tanks,  will they have to shut down?

   I believe the Gulf refineries working off Louisianna Light Sweet (LLS) will be okay - there is NO futures market for LLS, only a cash market.  LLS doesn't get piped to Cushing, so, the contango players can't tie up LLS.       

  Of course, eventually, the contango players will not "roll over" to the next month's contract and whoever bought the futures will be able to take posesssion of the crude.   The current contango in futures could go on for months ...

 There were 33 contracts for December 2017  now there are 34 (1000 bbls each)  and it closed at $76.28 - 0.94 /bbl. 

 

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