A hunt for any storage space turns urgent as oil glut grows by Devikakrishnak Jennifer_Hiller
FILE PHOTO: Crude oil storage tanks are seen from above at the Cushing oil hub, Oklahoma, March 24, 2016. REUTERS/Nick Oxford//File Photo
A topsy-turvy market that has oil prices for October delivery at $31 a barrel has oil firms anxious to sock away millions of barrels now to sell at a profit later.In Cushing, Oklahoma, home to dozens of large tank farms with combined space for about 76 million barrels, operators are fully booked, said traders. Storage there jumped by 5.7 million barrels the week before last, according to the latest U.S. Energy Information Administration .
“Quite honestly we were struggling for business. Now that the market has changed, everyone is our friend,” said Dana Grams, chief executive of Converge Midstream. For a time, it looked like prices would stabilize after the pair and other nations this month agreed to deepen cuts. But crude stocks in the United States rose by 19 million barrels overall the week before last, the EIA said, the biggest one-week increase in history, setting the stage for Monday’s historic decline.In addition to the onshore glut, there are about 160 million barrels of oil sitting on tankers waiting for buyers.
Shale producer Teal Natural Resources had one of its three crude buyers cancel a purchase agreement last month, sending it shopping for frac tanks. They are not cheap, Teal CEO John Roby learned after scouring the market.
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