- Winter Storm Warning issued for North Texas - @NBCDFW
- Editor's note: We're seeing numerous unconfirmed reports that Turkey may be moving military vehicles into Syria in an apparent attempt to guard the Tomb of Suleyman Shah, a sovereign Turkish exclave located in the Syrian state of Aleppo. - Jimmy
- Long lines at Rockhampton, Australia, fuel station as people get gasoline for generators; witnesses say wait is more than 3 hours long - @louisarebgetz
Crude Oil Pouring Into Cushing, OK
What Happens When Cushing Reaches Maximum Capacity?
NewsOK is reporting:
As the price of oil has plummeted over the past seven months, companies have stockpiled as much as 2.2 million barrels a week at Cushing, rapidly filling it to more than half capacity. As of Feb. 13, Cushing’s storage tanks held nearly 46.3 million barrels of crude, according to the U.S. Energy Information Administration.
The stored oil is worth almost $2.4 billion even at today’s depressed prices, and the companies that own the crude hope it will be worth much more.
The oil market is in contango, which means oil delivered in the future is worth significantly more than oil delivered today. The price of oil for March delivery slipped 98 cents Thursday to $51.16. Oil to be delivered in March 2016, however, settled at $60.26.
The more than $9 premium means companies make more money storing their oil at Cushing or another storage facility and waiting to deliver it into the market.
While the contango market is driving some of the storage increase, another issue is that producers continue to flood the market with more oil than consumers can handle.
At the current fill rate, Cushing could reach operational capacity by April, said Brian Busch, director of oil markets and business development at Genscape.
“I don’t think we’ll continue to fill at that rate. We saw some drop-off this week,” Busch said. “But I think Cushing will be filled sometime in May.”So, what happens when Cushing reaches capacity?