Well, that was a poor night! Brent oil is trading at $56.53 as I speak, down 5% from yesterday. A combination of factors are to blame. The rampant US dollar is one and the US storage capacity shortages another. On the latter, the EIA is estimating that:
Crude oil inventory data for the week ending February 20 show that total utilization of crude oil storage capacity in the United States stands at approximately 60%, compared with 48% at the same time last year. Most U.S. crude oil stocks are held in the Midwest and Gulf Coast, where storage tanks were at 69% and 56% of capacity, respectively, as of February 20.
Capacity is about 67% full in Cushing, Oklahoma (the delivery point for West Texas Intermediate futures contracts), compared with 50% at this point last year.
The full text of this article is available to MacroBusiness subscribers
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
