In mid-June when storage at Cushing fell below 20 million barrels, the spot price differential between international benchmark
Brent crude oil and U.S. benchmark
West Texas Intermediate (WTI) priced at Cushing fell just below $0 dollars per barrel. The five-day rolling average differential became negative from June 18 to June 24, and again from July 2 through July 8. The negative differential occurred as the WTI-Cushing price increased above the Brent spot market price, putting the spread at its lowest point since January 2022. The relatively high WTI-Cushing price suggests that recent low inventory levels may be near tank bottom levels, contributing to extreme tightness for Cushing storage operators and the mid-Continent crude oil market.
Storage facilities must generally operate within their working storage capacity limitations, which prevents inventories of crude oil and other products from truly falling to zero under normal conditions. This means that not every barrel of crude oil or petroleum in inventories is necessarily accessible. In extreme cases, an inventory facility may be unable to provide a product even though it is not technically empty, because it is effectively at the bottom of its working storage capacity.