November 1, 2021 [Seeking Alpha] – Stockpiles at the Cushing, Okla., crude oil storage hub – the biggest in the U.S. – are quickly approaching critically low levels, which could push crude prices above current multiyear highs.

A Bloomberg analysis explains that the Cushing storage tanks require a minimum level of oil to maintain normal operations, which traders estimate at ~20M barrels, but stockpiles have dropped by more than 4M barrels in two weeks to 31M and likely will keep falling fast due to soaring, pent-up demand all over the world.

“Crude oil could justifiably trade to the next level higher on the storage drought at Cushing alone,” Mizuho analyst Bob Yawger tells Bloomberg. “Forget about fuel switching, whether OPEC+ adds additional barrels, or dollar weakness. If Cushing continues to slide, it could get ugly quickly.”

J.P. Morgan analysts say Cushing could be just weeks away from effectively running out of crude, based on current rate of draws, which could cause WTI spreads to spike to record highs in a “super backwardation scenario.”

Bloomberg reports demand for U.S. barrels is higher than ever, with Asian buyers including India and Taiwan still in the market to purchase U.S. crude cargoes loading in early November, while South Korea has bought the most U.S. crude in the country’s history for November.

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