Crude Stocks to Decline | Russell T. Rudy Energy LLC
Stagnant demand, low prices and increasing domestic oil production have all led to record high crude stocks. According to a recent article in “World Oil”, inventories reached 471 million barrels (MMbbl) at the end of March. This led some industry observers to fear that the U. S. might be running out of crude oil storage capacity. However, industry consulting firm, Wood Mackenzie, estimates that there is still about 200 MMbbl yet to be used.
Wood Mackenzie predicts that as refineries conclude their seasonal maintenance and gear up for the summer driving season, they could increase crude throughput by as much as 1.7 MMbbl per day. This would more than offset any further increase in domestic crude production. Further, the consulting group speculates that if prices continue at their current depressed levels, crude production rates will flatten out.
Storage capacity concerns have primarily involved the major facility in Cushing, Oklahoma. However, the 250,000 barrel per day Cactus pipeline is scheduled to start up this month. This new pipeline will transport oil from the Permian Basin directly to Gulf Coast refiners, bypassing Cushing and further alleviating storage concerns there.
To read the article in its entirety, please go to http://www.worldoil.com/news/2015/4/1/record-us-crude-stocks-set-to-decline-wood-mackenzie .
