In January, crude oil arriving by pipeline and rail into Cushing, the delivery point of the U.S. crude futures contract, jumped nearly 11 million barrels to nearly 42.6 million barrels, the largest monthly build since the U.S. Energy Information Administration began tracking the data a decade ago.
On Thursday, data from energy information provider Genscape showed Cushing stocks rose a further 3.2 million barrels in the four days to Feb. 10, the biggest such increase ever.
Over the past 10 weeks, some 550,000 barrels per day (bpd) of crude have flowed into oil tanks across the United States, according to the EIA. That’s approximately one-quarter of the current global surplus estimated by OPEC.
The build-up in Cushing has made demand look more robust than it actually is, artificially supporting prices, say traders. The excess oil will eventually spill over into the wider market, further pressuring global prices that have recently stabilized following a seven-month dive.
“Once Cushing is full, the market will puke,” said one trader.