Crude oil storage at Cushing, but not storage capacity utilization rate, at record level
After increasing for 15 consecutive weeks, crude oil storage at Cushing, Oklahoma, reached 54.4 million barrels on March 13, according to EIA's Weekly Petroleum Status Report. This volume is the highest on record, but not the highest percent of storage utilization, as working storage capacity at Cushing has also increased over time.
Storage levels at Cushing are significant, because Cushing serves as the delivery point for the United States crude oil benchmark, West Texas Intermediate. Sited in central Oklahoma, Cushing is home to both a network of crude oil pipelines and storage capacity. The 70.8 million barrels of storage capacity in Cushing represent more than 60% of all crude oil working storage capacity in the Midwest (as defined by Petroleum Administration for Defense District 2) and about 19% of all commercial crude oil storage in the United States.
Although inventory levels at Cushing are at their record high, storage utilization (inventories as a percent of working storage capacity) are not at record levels. Capacity utilization at Cushing is now 77%, a large increase from a recent low of 27% in October 2014. However, utilization reached 91% in March 2011, soon after EIA began surveying storage capacity twice a year, starting in September 2010.
As explained in a previous article, utilization can be difficult to calculate, because EIA's reported inventory levels also include crude oil that is not in storage tanks. This larger inventory is in pipelines, and includes lease stocks (oil that has been produced but not yet entered into the supply chain), and crude oil in transit from Alaska (which only applies to inventories in the West Coast region).
At a national level, including these volumes in storage utilization calculations tends to overestimate storage utilization. At a specific site such as Cushing, though, this is less of a concern because there are no volumes in lease stocks and no crude oil in transit from Alaska.
Recently, the ability to ship crude oil in pipelines both to and from Cushing has increased; inventory levels can change more rapidly than in previous years. Using the absolute value of weekly changes, Cushing inventory levels in the previous two months have changed by about 2.2 million barrels (on a net basis). In previous years, the net weekly changes were more often in the range of 0.5 to 1.0 million barrels either in or out of Cushing.
Principal contributors: Hannah Breul, Owen Comstock