Crude oil storage inventories in the US are at their highest levels in
decades. Is that going to cause the price of West Texas Intermediate
crude to crash?
Probably not, according to Robert Rapier of Energy Trends Insider.
In fact, we're not even close.
Rapier writes that "oil
producers could continue to add a million barrels a week (which is about
the average over the past year) for nearly four years before crude oil
storage is actually full."
The best-known storage facility,
in Cushing, Oklahoma, would run out of space much sooner than that at
the current rate (about four months from now). But that still isn't
going to happen, according to Rapier:
We
are currently in the season when refinery utilization is lowest.
Refiners take equipment offline in fall and spring to do maintenance, so
they use less crude oil at this time of year. This maintenance usually
peaks in March, and then crude oil demand picks back up as refiners gear
up for the summer driving season. The
difference in refinery demand between this time of year and summer is
generally around a million barrels per day, so even if nothing else
changes that storage build should start to flatten.
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