Fuel storage tanks at a PT Pertamina depot at Pelumpang in Jakarta, Indonesia, on June 5, 2023. Photographer: Dimas Ardian/Bloomberg
Oil prices jumped to a fresh one-year high as crude stockpiles in the largest U.S. storage hub dropped to the lowest level since July 2022.
West Texas Intermediate (WTI) settled above $93 a barrel after inventories at Cushing, Oklahoma, dropped just below 22 million barrels, close to operational minimums. The premium for near-term barrels of U.S. benchmark West Texas Intermediate is trading at more than $2, the highest since July 2022, as the futures market reflects the physical tightness.
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While oil's rally has rekindled talk of $100 crude, the gains had slowed over the past week. Key consumer India has noted the negative effects of higher prices on its economy, which raises some questions about demand next year.
Still, inventories have been falling in most regions. At the Cushing hub, tanks are operating at 25 percent of capacity.
"My fear in this market is we have de-stocked so much inventory," Amrita Sen, co-founder and head of research at consultant Energy Aspects, told Bloomberg TV. "Right now, what's going on in the U.S.—Cushing is dry."
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—With assistance from Lisa Abramowicz.
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