What happens to oil prices when there’s no room left to store the stuff?

Energy analysts at Raymond James in Calgary believe the current rate of injections could cause Cushing, Oklahama C the most important storage hub in the world C to near full capacity within 11 weeks, which could impact WTI prices.

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Brent prices are up more than 30% since bottoming in mid-January, but WTI has only risen about 10%, widening the gap between the two by about US$9.80 per barrel. Concerns about rising storage levels and available storage capacity are partly responsible.

Energy analysts at Raymond James in Calgary believe the present rate of injections could cause Cushing, Okla. – the most important storage hub on the planet – to close full capacity within 11 weeks.

“What happens after that point is really a much bigger question mark, however it would appear to all of us that the requirement for additional storage won\’t go away in the near future,” the analysts said inside a note to clients, adding that further volatility in WTI prices should be expected as Cushing approaches full capacity.

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