Texas Bound and Flyin’ – Where Gulf Coast Crude Oil Inventory Is Stored

Gulf Coast crude storage is at record levels and looks set to continue growing as new pipeline capacity opens up later this year from Cushing and the Permian Basin. At Magellan’s Analyst Day presentation last week (April 9, 2014) the company said that demand for crude storage at all locations remains strong with average utilization of 97 percent plus. OilTanking say their Houston crude storage is 99.1 percent contracted. Today we ponder where Gulf Coast crude stocks are located.

This blog is the third in a series looking at surging crude inventories on the Gulf Coast since the start of 2014. In Texas Bound and Flyin’ – Part 1 we described the ongoing drain of crude oil from the Cushing, OK Midwest trading and pipeline hub. Stocks at Cushing have fallen by over 13 MMBbl to under 28 MMBbl since the end of January in part because the new TransCanada Cushing Marketlink pipeline coming online to Nederland, Port Arthur. The crude exodus has also been encouraged by backwardation in the futures market (declining prices in forward months) as well as a surplus of outbound pipeline capacity at Cushing versus inbound supplies. In Texas Bound and Flyin’ – Part 2 we learned how as Cushing stocks fell Gulf Coast stocks increased by 36 MMBbl to 202 MMBbl since the end of January. That’s a record for crude stocks at the Gulf Coast since the Energy Information Administration (EIA) started collecting data in 1990. Alongside new, repurposed and reversed pipelines bringing crude to the Gulf Coast we noted increased inland and coastal waterborne movements as well as a build-out of crude by rail unload terminals – all adding to the flood of crude headed to Gulf Coast refineries. The ban on crude oil exports is exacerbating the situation. In this episode we look at the makeup of crude storage capacity in the Gulf Coast region.

This analysis coincides with the release of RBN Energy’s latest drill down report “I’m Waiting For the Crude – Gulf Coast Crude Terminals and Storage”. This RBN Drill-Down Report examines the impact of these new flows, discusses the need for new crude handling facilities and provides a survey of the terminal infrastructure expansions underway to accommodate the transition to a much more integrated and flexible Gulf Coast crude oil market. The report is available for download exclusively to RBN Backstage Pass subscribers. For more information on the report click the link in the ad below.

N E W ! !   I’m Waiting For the Crude –

Gulf Coast Crude Terminals and Storage

We have just released our fifth Drill-Down report for Backstage Pass subscribers examining Gulf Coast crude oil flows, infrastructure projects and market implications.  Subscribers get full access to all Drill-Down reports, blog archive access, and much more. More information on I’m Waiting for the Crude here.

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