Empty oil tanks at key storage hub show speedy demand rebound
https://www.houstonchronicle.com/business/energy/article/Empty-Oil-Tanks-at-Key-Storage-Hub-Show-Speedy-16262117.phpJune 21, 2021
...For the first time since before the pandemic, empty tanks are being offered for lease at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil futures. At least 1.4 million barrels of storage is up for rental starting in July, for roughly 12 cents per barrel a month, said Steven Barsamian, chief operating officer at storage brokerage Tank Tiger. That’s a stark contrast to at least 60 cents charged when there was little space left about a year ago....
...Meanwhile, shale producers are sticking to their pledges to focus on balancing their books and boosting returns to shareholders, rather than increasing output. U.S. production is 15% below its peak last year, limiting flows to the storage center.
So, traders are rapidly draining their storage tanks to supply refineries with every barrel of crude feedstock they need.
Empty tanks are typical of a market where demand is outpacing supplies and traders are getting a premium on the nearest deliveries, making it unprofitable to keep oil in storage -- a pattern known as backwardation....
