Crude Storage
Re: Crude Storage
Any thoughts on why the issue with storage in Cushing?
Re: Crude Storage
Near term demand? I don't know
Re: Crude Storage
From Barrons (original Sept 27, updated yesterday)
https://www.barrons.com/articles/oil-trading-is-going-haywire-as-storage-tanks-run-dry-87cb7ce8?mod=Searchresults
Oil Trading Is Going Haywire as Storage Tanks Run Dry
... The main reason for the lack of oil is that refiners are using nearly all their capacity to take crude and pump out gasoline and diesel, which are both fetching strong margins. In addition, a pipeline outage in Cushing forced oil to flow elsewhere. Gasoline prices are now at $3.83 per gallon....
... The situation is also wreaking havoc in the oil futures market. Speculators are betting on oil prices to keep rising as oil supplies run short. The surge in prices of the November futures contract has forced the market into a particularly steep form of “backwardation”—when near-term prices are higher than future prices. Traders now have strong incentives to sell oil soon instead of holding on to it to sell later. The December contract is thus trading at a $2 discount to the November one, much wider than usual. ...
https://www.barrons.com/articles/oil-trading-is-going-haywire-as-storage-tanks-run-dry-87cb7ce8?mod=Searchresults
Oil Trading Is Going Haywire as Storage Tanks Run Dry
... The main reason for the lack of oil is that refiners are using nearly all their capacity to take crude and pump out gasoline and diesel, which are both fetching strong margins. In addition, a pipeline outage in Cushing forced oil to flow elsewhere. Gasoline prices are now at $3.83 per gallon....
... The situation is also wreaking havoc in the oil futures market. Speculators are betting on oil prices to keep rising as oil supplies run short. The surge in prices of the November futures contract has forced the market into a particularly steep form of “backwardation”—when near-term prices are higher than future prices. Traders now have strong incentives to sell oil soon instead of holding on to it to sell later. The December contract is thus trading at a $2 discount to the November one, much wider than usual. ...
Re: Crude Storage
Good stuff. Thanks for posting.