Empty the last seen levels when the US Oil Hub crude was $ 100

(Bloomberg) – Large U.S. warehouses are rapidly approaching low levels. The last batch of barley cost more than $ 100 a barrel.

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Storage tanks in Cushing, Oklahoma, require a small amount of oil to maintain their normal operation, which traders believe is about 20 million barrels in total. Over the past two weeks, the stockpiles of more than 4 million barrels have fallen to an unprecedented level of 31 million, and the demand for light sweets in the United States is expected to decline rapidly.

The outbreak has been a major turning point in the oil industry since last year, when traders took over fuel storage tanks at sea. The slowdown in demand has been exacerbated by the energy crisis, which has led European and Asian buyers to hunt for cheap barrels. With stocks falling to some of the lowest in the coming weeks, traders in some of the world’s biggest oil traders said, making the market even more volatile.

“Crude oil could be the next step in the Cushing drought alone,” said Bob Yugger, future director of Mizuho Security USA. Forget about switching fuel, whether OPEC + adds more barrels or if the dollar weakness continues to slide, it will quickly become ugly.

Cushing’s rapid depletion threatens to overshadow global oil supplies and raise prices. Rising oil prices are rising for road fuel, freight and air transport and climate change, just as many countries are recovering from the epidemic.

With JupMorgan Chase & Co. Analysts report in their report.

Demand for cooking oil has increased because it is the cheapest in the world and its stock is declining rapidly. The demand for US barrels is higher than ever, he said, noting that South Korea bought the largest U.S. crude in its history in November.

Asian rulers, including India and Taiwan, said they were still in the market to buy US crude in early November, highlighting the pace of supply.

The global energy crisis has made Kush’s light, sweet and savory products more attractive to the world market because sulfur has less sulfur than other fuels in hydrocrackers. Hydrocracker is mostly based on hydrogen from natural gas – prices have recently risen sharply in parts of Europe and Asia. The global energy crisis prompted Asia to turn to the United States for oil.

Cushing, the future of US crude oil, weighs heavily on the future of the oil curve, a testament to the tightness of the market. The price difference between oil contracts for the fastest delivery month after the so-called rapid distribution has been at an all-time high for more than three years. When many faster values ​​are higher than the later ones, it is called backwardness and is usually used as an indicator.

The recent move on WTI broadcasts indicates that strong images of Cushing will continue, pushing the stock of its assets to the bottom of the tank, said North American Crue Energy Director Jenna Delani.

Another Cushing status indicator is the WTI package, which allows traders to transfer long positions from one contract to the next. It hit 75 cents a barrel on Thursday, the strongest since 2018.

There are no signs of a reduction yet. Cushing’s products fell 1.9 million barrels between Friday and Tuesday, traders said, citing data from Wood McKenzie.

(Updates with WTI Cash Pack in the last paragraph.)

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