The crude oil inventories of the U.S may record a historic low by the end of September due to surging oil demand. The historic low levels may be seen as the demand continues to outpace production levels.
The storage levels at the storage site Cushing, Oklahoma, are a delivery point for West Texas Intermediate. West Texas Intermediate is one of the leading global oil benchmarks. The storage of oil came down by 4 million barrels in the last two weeks. The incident has brought the Stockpile to the lowest since March 2020. Analysts and traders are concerned that the oil supply has been dwindling dramatically, and it had not been so since September 2018.
The Cushing, Oklahoma, stores the oil produced across Western Canada, Midwest, and West Texas. The inventory has the largest storage capacity of oil than any other Stockpile in the world.The shale oil production is still 15% off of its pre-pandemic levels, and the oil imports are low from Canada. However, the traders and oil executives are afraid that the oil prices may surge in the coming days as the oil supply tightens.
The storage of oil at Cushing is currently 4.17 million barrels. In the coming days, the Stockpile could drop to even lower levels not seen in the last three years. Though the refineries have ramped up production, the shortage may be seen as still lagging. According to analyst Chris Sloan, the inventories could fall approximately by 30-million barrels in the coming months.