Just how important is Oklahoma’s Cushing Hub in the overall consideration of crude oil prices around the world? It plays more of a critical role than some might consider—at least based on a recent Reuters report.
Some observers believe oil prices in the U.S. are not likely to rebound in the coming few months—unless there is a depletion of crude oil prices coming to Cushing, which is considered the crossroads of America’s crude oil pipeline system.
U.S. oil prices are unlikely to rebound much in the next two months – unless there is another depletion of deliverable supplies at Cushing and a broader drawdown on the Gulf Coast.
As OK Energy Today reported in the past week, Cushing continued seeing a decline in its crude oil inventories, The current level at the northern Oklahoma hub is 30.96 million barrels, down from the 32.66 million barrels in the previous week. Its current level is also down from 38.35 million barrels one year ago.
So what makes Cushing so important? As Reuters recently reported, the drawdown on crude stocks at Cushing has been “more than twice as fast as the average over the previous ten years.” As a result, its crude inventories were 8 million barrels below the seasonal average as of last week.