![]() ![]() Historically, gasoline stocks build in the winter in anticipation of the peak summer driving demand.Īs it became apparent that the summer driving season would be significantly curtailed, RBOB futures prices started to decline at a faster pace than crude oil prices. RBOB futures is an important indicator for global gasoline as it is the only gasoline futures contract to trade electronically around the clock. The futures market for RBOB gasoline forecasted demand concerns early when prices traded at a 20-year low of $0.376 on March 23, 2020. The first indicator of the energy demand destruction from COVID-19 was seen in the New York Harbor RBOB gasoline futures contract (RBOB). The unprecedented global market fundamentals put intense stress on the oil industry in the first half of 2020. From there, the firm can elect to take the oil into storage or into a pipeline with connectivity to Midwest refineries and to the Gulf Coast market. ![]() A commercial company that elects to take delivery after the termination of the WTI futures contract must have storage and/or pipeline capacity connected to one of the NYMEX delivery locations in Cushing. The Enterprise terminal provides a key junction point in Cushing, capable of facilitating the transfer of tens of millions of barrels of crude oil every month. The WTI futures contract allows for delivery through Enterprise or Enbridge facilities in Cushing or at a facility that is connected to either. It is not just the storage or pipeline capacity that make Cushing the critical hub, but also the interconnectivity between a diverse mix of operators at Cushing. The outbound pipelines supply crude oil to the main refining centers in the gulf coast and Midwest. shale oil areas, including the Bakken, Niobrara and Permian producing areas. The inbound pipelines deliver crude oil streams produced in Canada and the U.S. The pipeline infrastructure in the Cushing market is expansive, with approximately 3.7 million barrels per day (bpd) of inflow pipeline capacity to Cushing and 3 million bpd of outflow capacity. Energy Information Administration (EIA), the working storage capacity in Cushing is 76 million barrels and 91 million barrels of total shell capacity as of September 2019. Today, Cushing is the key nexus of market fundamentals for the global crude oil market, with nearly two dozen pipelines and 20 storage terminals.Īccording to the U.S. When the WTI futures contract was first listed in 1983, Cushing was a vibrant hub for cash market trading of crude oil with a network of pipelines, refineries and storage terminals. ![]()
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