Dead Stock
The agency that counts the barrels spent Thursday explaining which of them cannot move — and Cushing's twenty million is running short of live ones.
The day after the weekly report posted its 13.3-million-barrel headline — and the day my assay of that parcel went out under the title Not Good Delivery — the EIA’s Today in Energy desk published a short explainer built around a question, “What are tank bottoms?”, illustrated not with a price chart but with a schematic of a storage tank crossed by a dashed line labelled the suction line.
Not Good Delivery
The Weekly Petroleum Status Report posted at half past ten on Wednesday morning, eighteen hours after the US Navy’s blockade of Iranian ports took effect and a few hours after a fourth consecutive night of strikes ran seven hours down Iran’s coastline — and the tables inside it describe a market that stopped existing on Friday afternoon.
The piece deserves its steelman before anything else, because it is the most honest document the agency has released this month: it notes that Cushing crude stocks fell below 20 million barrels from the week ending 19 June and stayed there until the 10 July week scraped back to the line, that storage facilities need a minimum volume in their tanks and pipework simply to keep pump suction effective, and that in consequence — the agency’s own words — “not every barrel of crude oil or petroleum in inventories is necessarily accessible”.
Read that sentence against the institution publishing it and its weig…
