Oil jumps to one-year high as Cushing stocks hit critical levels

Oil jumped to a fresh one-year high as crude stockpiles in the largest US storage hub dropped to the lowest since July 2022.

West Texas Intermediate, or US oil, settled above $US93 a barrel after inventories at Cushing, Oklahoma, dropped just below 22 million barrels, close to operational minimums.

Near 5pm in New York, US oil was up 3.6 per cent to $US93.68 a barrel. Brent crude was 2.8 per cent higher to $US96.55.

The premium for near-term barrels of US benchmark West Texas Intermediate is trading at more than $US2, the highest since July 2022, as the futures market reflects the physical tightness.

While oil’s rally has rekindled talk of $US100-crude, the gains have slowed over the past week. Key consumer India has noted the negative effects of higher prices on its economy, which raises some questions about the demand outlook into next year.

Still, inventories have been falling in most regions. At the Cushing hub, tanks at the storage hub are operating at 25 per cent 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 US – Cushing is dry.”

Bloomberg