The
amount of storage being used to store crude oil in the U.S. is on the
rise even as storage capacity grows, a report from the U.S. Energy
Information Administration reveals.
The report looks at crude storage
trends from January 2012 through June 2016, some four and a half years,
a period that has seen a dramatic rise in U.S. crude production and
stocks.
Weekly U.S. commercial crude inventories have increased more than 71 million bbl, 15% just since the end of September, EIA reports. Crude oil storage capacity utilization rates are near a high of 73% for the week ending June 10.
From September 2015 to March 2016, the U.S. added 34 million bbl, 6% of working crude oil storage capacity, the largest expansion of commercial crude oil storage capacity since EIA began tracking the data in 2011.
The expanded capacity aided in accommodating the growth in U.S. crude oil inventories, which topped 500 million barrels at the end of January 2016. U.S. crude supplies increased in 24 of the 30 weeks from September to March, although in recent weeks stocks have started to level off and decline as U.S. producers have cut production in light of depressed prices.
Nonetheless, the extra capacity has been fully used as reflected in the high storage utilization rates. EIA says storage utilization at Cushing, Okla., averaged 87% over the past four weeks, compared to 81% for the same period last year. U.S. Gulf Coast region storage rates averaged 72% over the past four weeks, after never being more than 70% in the prior four years.
Oil companies have needed more storage since available crude supplies have topped demand for most of the last two years. Oversupply has created a market price structure where forward values of crude are more expensive than prompt values providing an incentive to store barrels.
EIA points out that the largest commercial crude oil storage capacity expansion since September has taken place in the Midwest and Gulf Coast regions, which added 19 million and 13 million bbl, respectively. Within the Midwest, storage capacity at Cushing expanded 1.5 million bbl.
Combined, these two areas account for 82% of total U.S. commercial crude oil storage capacity.
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Weekly U.S. commercial crude inventories have increased more than 71 million bbl, 15% just since the end of September, EIA reports. Crude oil storage capacity utilization rates are near a high of 73% for the week ending June 10.
From September 2015 to March 2016, the U.S. added 34 million bbl, 6% of working crude oil storage capacity, the largest expansion of commercial crude oil storage capacity since EIA began tracking the data in 2011.
The expanded capacity aided in accommodating the growth in U.S. crude oil inventories, which topped 500 million barrels at the end of January 2016. U.S. crude supplies increased in 24 of the 30 weeks from September to March, although in recent weeks stocks have started to level off and decline as U.S. producers have cut production in light of depressed prices.
Nonetheless, the extra capacity has been fully used as reflected in the high storage utilization rates. EIA says storage utilization at Cushing, Okla., averaged 87% over the past four weeks, compared to 81% for the same period last year. U.S. Gulf Coast region storage rates averaged 72% over the past four weeks, after never being more than 70% in the prior four years.
Oil companies have needed more storage since available crude supplies have topped demand for most of the last two years. Oversupply has created a market price structure where forward values of crude are more expensive than prompt values providing an incentive to store barrels.
EIA points out that the largest commercial crude oil storage capacity expansion since September has taken place in the Midwest and Gulf Coast regions, which added 19 million and 13 million bbl, respectively. Within the Midwest, storage capacity at Cushing expanded 1.5 million bbl.
Combined, these two areas account for 82% of total U.S. commercial crude oil storage capacity.
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