In the recent development of events encircling oil, the biggest US crude depot faces critically low stockpiles levels. Previously it happened when the crude oil reached USD 100 per barrel.
Notably, the storage tanks in Oklahoma and Cushing require authorities to maintain standard operations for the operating purpose. As per traders, that level is around 20 million barrels.
Unexpectedly, during this time, stockpiles have already reduced by 4 million barrels to 31 million barrels. And if experts are to be believed, it will further drop following the growing demand for light crude oil of the US.
Interestingly, the situation has reversed from the previous year when due to the outbreak of the COVID-19 pandemic, traders stored the glut of oil in tankers located near the sea.
The drawdown has been triggered by continuous demand in the market. Furthermore, the energy crisis in European nations has exacerbated the condition. Moreover, hunt by Asian buyers for oil has deepened the issue.
It is expected that in the coming weeks, the stockpiles will fall further. The market will turn bullish, indicated experts and traders from some of the biggest oil producers.
Mizuho Securities USA’s director of the futures division, Bob Yawger, stated that crude oil would touch the next level heights following the storage drought at Cushing itself.
He added that continuous slide at Cushing alone will make things worse, OPEC+ adds more barrels or dollar weakness.
The swift depletion of Cushing is indicating the worsening situation of global oil supplies. That will threaten the oil prices to move even higher than anticipation.
The surging fuel prices are already triggering air travel, freight expenses and road fuel cost to rise. Moreover, it is stocking inflation to another level.
For the global market, the crushing availability of oil has made sweet and light crude from Cushing even more attractive.