Oil Contango Soars as Oklahoma Brims With Crude
April 26 (Bloomberg) -- Oil storage costs are soaring to the highest level in four months as tanks in Oklahoma brim with near-record crude inventories.
Crude for delivery in June cost $1.95 a barrel less than for July on April 21, the biggest gap since Dec. 15 on the New York Mercantile Exchange. The discount, or contango, which mirrors the expense of stockpiling, emerged after inventories jumped 5.8 percent in the week ended April 16 to 34.1 million barrels in Cushing, Oklahoma, where traders make deliveries for futures contracts, government data show.
Inventories are near the record 35.7 million barrels on Jan. 1 because of rising Canadian imports and a seasonal decline in demand as refineries shut for maintenance. Supplies are so plentiful that West Texas Intermediate, or WTI, oil costs less than benchmark Brent crude in Europe, a lower quality crude. Brent cost more than WTI three times in the past year.
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April 26 (Bloomberg) -- Oil storage costs are soaring to the highest level in four months as tanks in Oklahoma brim with near-record crude inventories.Crude for delivery in June cost $1.95 a barrel less than for July on April 21, the biggest gap since Dec. 15 on the New York Mercantile Exchange. The discount, or contango, which mirrors the expense of stockpiling, emerged after inventories jumped 5.8 percent in the week ended April 16 to 34.1 million barrels in Cushing, Oklahoma, where traders make deliveries for futures contracts, government data show.
Inventories are near the record 35.7 million barrels on Jan. 1 because of rising Canadian imports and a seasonal decline in demand as refineries shut for maintenance. Supplies are so plentiful that West Texas Intermediate, or WTI, oil costs less than benchmark Brent crude in Europe, a lower quality crude. Brent cost more than WTI three times in the past year.
Read more...