November 20, 2024 [RBN Energy]- The small town of Cushing, OK, occupies a central place in the U.S. crude oil market thanks to its hundreds of storage tanks and numerous pipeline connections. And while it might seem far removed from the factors that influence the global crude market, what happens elsewhere directly impacts the storage volumes at Cushing. In today’s RBN blog, we review the critical role that Cushing plays in crude oil storage, show how the forward curve can influence inventories, and look at what might be behind the recent uptick in storage levels, which followed a four-month slide.
Cushing — the “Pipeline Crossroads of the World” — is never far from our hearts and minds here at RBN. A popular topic in the RBN blogosphere, Cushing is connected to several inbound pipelines from Western Canada, the Bakken, the Niobrara, the Permian and SCOOP/STACK, and is also linked to outbound pipes that deliver to inland refineries and Gulf Coast refineries and export terminals. The Oklahoma hub is also the delivery point for the CME/NYMEX futures contract for West Texas Intermediate (WTI) — one of the most widely and actively traded physical commodity futures contracts in the world and the benchmark underpinning most physical U.S. crude oil purchase and sales contracts.
Cushing is home to the nation’s largest commercial crude tank farm, with more than 350 aboveground tanks all sited within 10 miles (shaded areas in Figure 1 inset below), according to the Energy Information Administration (EIA). Producers, midstreamers and refiners use Cushing for operational purposes — that is, as a sort of waystation where crude can be received, blended to meet refinery specifications, and sent out when needed to refineries and export terminals. Those companies and marketers also use storage at the hub for commercial operations to take advantage of market opportunities around the timing, volume or quality of crude supplied from producers to refiners.
(RBN’s Cushing Crude Oil Playbook provides the first one-stop, comprehensive guide to the hub’s assets and details the infrastructure each company controls with maps and comparable attribute tables. It also lists each company’s connectivity — upstream and downstream — and dives into each pipeline’s history and specifications. It has been recently updated with M&A activity, along with current storage capacities and pipeline connectivity at the individual terminals.
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