LOUISVILLE, Ky., Jan. 5 (UPI) -- The amount of crude oil held at the main U.S. storage hub in Cushing, Okla., set a record to start off 2016, market analysis from Genscape finds.
By more than 340,000 barrels, the amount of crude oil in storage in Cushing beat the previous record set April 14, a report finds. Genscape said a combination of year-end tax strategies and fundamentals in the crude oil market were in part behind the increase in storage.
The April high was set when the price for West Texas Intermediate crude oil, the U.S. benchmark price, was in a 12-month contango structure, meaning the future price was higher than the daily market, or spot, price.
Inventories in Cushing were at an all-time high for the week ending Jan. 1.
"Capacity utilization at Cushing is currently 2 percent below the all-time high set in March 2011," Genscape added in its market snapshot. "Since that time, close to 32 million barrels of storage capacity has been added to the storage hub."
Higher inventories are in part behind steady weakness in crude oil prices, with WTI trading about 35 percent lower than when the previous storage record in the United States was established.
According to data from the U.S. Energy Information Administration, total U.S. commercial crude oil inventories, not counting volumes stored in the Strategic Petroleum Reserve, increased by 2.6 million barrels from the week ending Dec. 25.
"At 487.4 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years," EIA said in a weekly petroleum status report.