Inventories in the largest US crude oil delivery hub in Cushing, Oklahoma, were lower than the average in the last three years as gasoline and diesel demand rebounded in line with the economic recovery after the COVID-19 pandemic. Rising global demand for US crude has also accelerated the drawdown in Cushing. The stock decline is expected to continue for months, supporting US crude prices which have already risen by about 25% over the past two months.
Data from the US Energy Information Administration showed Cushing stockpiles had fallen to 27.3 million barrels at the end of last week, the lowest since October 2018. Cushing stocks are now about half of the level at this time a year ago. In contrast, stockpiles in the US Gulf regions were at 247 million barrels, rising from 224 million barrels at the same week in 2019 before the pandemic.
Analysts said US refiners are ramping up their throughput to meet improving demand for gasoline and diesel, which led to the decline in Cushing. At the same time, US crude output has been slow to recover from last year. EIA data showed that domestic oil production had stayed under 11.5 million bpd in recent weeks, compared to roughly 13 million bpd at the end of 2019.
