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Home Front: WoT
Where Has All The Oil Gone?
2007-10-08
From Wall Street Journal, dunno how long the free linky will last:
Since summer, one of North America's most important oil towns has witnessed a disappearing act. The mammoth storage tanks that blanket the rolling grasslands around this remote prairie town had been filled to the brim with crude oil. They aren't anymore. Since May, millions of barrels of crude have been sold off, and Cushing's inventory has fallen by nearly 35%.

Oil traders around the globe obsess about inventory. Storage levels have fallen, not just in Cushing, but in other oil depots as well. Fearful that the U.S. cushion of spare fuel could hit a low by year-end, traders drove prices to a record of nearly $84 a barrel last month. On Friday, oil closed at $81.22 on the New York Mercantile Exchange, up 33% this year.

The reasons Cushing's crude has been disappearing are surprisingly complex, and shed light on the growing involvement of speculators in the global oil market. Tanks are emptying partly because producers have been straining to keep up with demand. But investment banks and other financial firms also played a part by abruptly shifting their oil-trading strategies this summer. Even the credit crunch sparked by the subprime mortgage fiasco had an effect.
Posted by:Seafarious

#11  Bobby's right in #7 & 8 - I drive the skyway through Gary, Indiana every month or so - google over there and see how you could take all of Cushing and scatter it amongst the mills and nobody would even notice. Perhaps it stands out more noticably in the Okla. prairie, but it's really not that significant as storage goes.
Posted by: Unereque Platypus5520   2007-10-08 17:08  

#10  It's a troubled market because of government interference. The restrictions on refinery building and exclusion of exploitable land is not of non-governmental making. We can point to China and India, but when we have the capacity for self service here within our own border, its all about 'will' not about resources.
Posted by: Procopius2k   2007-10-08 10:12  

#9  bigjim-ky; 30 years ago we had a 'non-dynamic' market, with shortages and lines (AND high prices). For the moment the dynamic market has mostly kept the shortages and lines away. For this accomplishment the vultures expect to be paid.
Fear not - before too much longer even they won't be able to help.
Posted by: Glenmore   2007-10-08 07:21  

#8  I trield Google Map's new linking feature and managed to blow it.

Google map Cushing, OK and go south of town, east of the airport.
Posted by: Bobby   2007-10-08 06:07  

#7  Oil tanks "stretching to the horizon" seems a bit of a ... stretch. Map
Posted by: Bobby   2007-10-08 06:05  

#6  That yes, plus the whole damned thing is rigged.
I'm sick and tired of hearing how a "Dynamic" market is better for me the consumer. It hasn't done shit for me, it only serves to fatten up the vultures.
Posted by: bigjim-ky   2007-10-08 05:48  

#5  The worldwide economic boom (especially in China and India) is responsible for the high crude futures prices. Commodity prices are very responsive to supply/demand imbalances and there is no reason for prices to drop in the foreseeable future.
Posted by: Thrusort Speaking for Boskone9814   2007-10-08 04:15  

#4  What a dumb question from the Journal. There is pre-Summer hoarding every year. This year, concerns about Iranian aggression has caused extended hoarding. Available oil is either being stored by the retailers, or held in trust by the producers. The oil is out there and conditions are ideal for more exploration. However, we need to grant heavy subsidies to those who convert their vehicles to natural gas or propane fuel use, if not hybrid or electrical.

Check platts.com for industry info.
Posted by: McZoid   2007-10-08 03:27  

#3  The STATUS QUO is good Regressionism - nuthin' says PROGRESS + UPWARD EVOLUTION than NON-PROGRESS and TOTALITARIAN STATIC-ISM/STATISM = STILLNESS.
Posted by: JosephMendiola   2007-10-08 01:43  

#2  It is imperative that people are educated on how this industry works. This is a global issue and it is only getting more dire. It is also imperative that government stay out of it because they f everything up to the max.
Posted by: newc   2007-10-08 00:27  

#1  Oil prices are at their all time height and oddly enough people are selling the stockpiled quantities? Hardly a mystery.
Posted by: rjschwarz   2007-10-08 00:25  

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