Cushing Crude Inventories Plummet as Global Demand Surges

Cushing, Oklahoma's crude oil inventories hit their lowest levels since October 2014, falling below 20 million barrels for eight consecutive weeks. The drawdown coincided with disruptions to Middle East oil flows following the Strait of Hormuz crisis, which increased demand for U.S. crude exports.

As global buyers turned toward American barrels, Cushing stocks dropped from roughly 29 million barrels in early May at a pace of about 800,000 barrels a week. Nationally, total U.S. commercial crude inventories sat at roughly 409.7 million barrels as of mid-July, about 4 percent below the five-year average.

The math is straightforward: global demand for U.S. barrels went up sharply, and the physical buffer that normally absorbs swings in supply and demand got drawn down to answer it. The Cushing tank's minimum working level, or 'tank bottom,' means storage tanks cannot be emptied to zero under normal operating conditions.

The spread between Brent and WTI briefly turned negative, with WTI trading above Brent for the first time since January 2022. This reflects buyers competing hard for crude sitting at a hub that increasingly could not spare it.