Cushing stockpiles tank as crude storage frenzy subsides
According to the Energy Information Administration’s (EIA) bi-annual crude storage capacity report, stockpiles in the US have fallen dramatically since the spring of 2017, returning to levels not seen since the end of 2014.
The past decade has seen a major boom in storage tank construction south of the border. From 2011 to 2017, over 165 million barrels of new capacity was built. Utilization rates peaked in the spring of 2017 at about 70%. Tanks at the Cushing storage hub in Oklahoma, hit a high of 88% during that time.
New tank construction has been relatively subdued in the past two years. Utilization rates have declined across all five PADDs, including Cushing. Total US commercial stockpiles have declined by 8.5 million barrels since last spring, and a whopping 131 million barrels since the highs of 2017. Only 15 million barrels of additional capacity was built in the past two years.
The lifting of the US crude export embargo at the end of 2016 is the likely the main reason for the sharp decline in US inventories. Crude exports have risen from about 500,000 bbl/day to about 2.5 million bbl/day by the end of 2018. US crude production has surged by 2 million bbl/day during this period, while imports and volumes put through US refineries have been roughly unchanged.
Weekly US commercial stockpile estimates are published every Wednesday morning. Official inventory data, including changes in tank storage capacity, is published bi-annually in May and November, representing Q1 and Q3 figures, respectively.
Note that weekly data includes crude volumes in transit (such as pipelines), whereas bi-annual data is crude held in storage only.