Oklahoma Swing - The Cushing Crude Hub

Inventory Roller Coaster, New Projects Are Reminders of Its Relevance

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The storage and trading hub in Cushing, OK, plays critically important roles in both the physical and financial sides of the crude oil market. Located at a central point for receiving crude from major production areas –– Western Canada, the Bakken, the Rockies, SCOOP/STACK and the Permian among them –– the hub also has numerous pipeline connections to Gulf Coast refineries and export docks, and to a large number of inland refineries. And, with Cushing’s 94 MMbbl of storage capacity and status as the delivery point for NYMEX futures contracts for West Texas Intermediate (WTI), the hub’s inventory levels and the WTI-at-Cushing price are closely watched market barometers.

This Drill Down Report begins with a brief review of Cushing’s history, followed by a detailed look at the hub’s terminals and storage capacity; existing pipelines into and out of Cushing; the hub’s role in crude blending; and the new pipeline and storage projects being planned. Then finally, it sums up where Cushing stands today.

Key take-aways from the report include:

  • Cushing, the ‘Pipeline Crossroads of the World,’ has a staggering 94 MMbbl of crude storage, 3.7 MMb/d of inbound pipeline capacity and 3.1 MMb/d of outbound pipes.
  • The hub receives crude from a number of key production areas, including Western Canada, the Bakken, the Rockies, SCOOP/STACK and the Permian.
  • About half of the pipeline capacity out of Cushing heads to Gulf Coast refineries and export docks; the other half delivers oil to inland refineries.
  • The hub is also the delivery point for NYMEX’s futures contract for WTI; much of the activity at Cushing involves blending various crudes to meet the WTI spec.
  • Rising production, growth in crude exports and other factors are driving the development of new pipelines into and out of Cushing as well as new storage capacity.

Oklahoma Swing is included in RBN Energy’s 2018 Drill Down report series, a suite of reports covering many of the key issues expected to impact the markets for crude oil, natural gas and natural gas liquids. Drill Down reports are part of RBN Backstage Pass™ premium resources that also include Blog Archive Access, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. By subscribing to RBN’s Backstage Pass™ Premium Services, you plug into our network and get direct access to our premium resources.

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