Depletion of oil at Cushing… WSJ

Jinjoo Lee has a very good piece in today’s WSJ on oil in storage at the WTI futures delivery point in Cushing, Oklahoma… And, he quotes the always excellent Ilia Bouchouev… What a difference a year makes… Do read the whole thing…

”Both JPMorgan and Mr. Bouchouev note that it is unlikely for Cushing storage to actually hit bottom, just as the oil glut last year didn’t actually lead to Cushing’s storage reaching tank tops. JPMorgan, for example, said in its report that there is an increasing flow of crude oil from Canada and signs that U.S. oil production will increase in the fourth quarter. In previous bouts of low storage at Cushing, physical traders were nimble enough to react and redirect oil to the depleted hub. Moreover, WTI is now priced at only a small discount to Brent crude, the international benchmark, which should curb further flows of oil abroad. Additional draws at Cushing still could send prices higher, though.”