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US Crude Oil Stocks are Jumping Suddenly

Oil stocks on the Gulf Coast of the United States have risen to their most significant level in nearly ten years, with 20 million barrels added since the beginning of the month. More robust export demand from Asia has resulted in additional barrels being directed to Gulf Coast export hubs. According to Bloomberg, the accumulation is just transitory as refiners begin to rev up operations following seasonal maintenance.

One of the reasons for the significant fall in Oil stockpiles at Cushing, Oklahoma—the delivery point for West Texas Intermediate contracts—appears to be an increase in supplies diverted to the Gulf Coast for exports and local processing. Bloomberg reported in early October that Cushing inventories had been taken down by the most in a week in five years, plummeting to the lowest level since 2018.

Meanwhile, Gulf Coast refiners are still struggling to get all the crude Oil  they require following a terrible storm season that cost the industry 30 million barrels of total supplies.Imports from OPEC+ countries are also down, as Bloomberg has reported, as imports from Latin America. Early this week, the inventory reduction at Cushing pushed prices higher, indicating sustained strong demand in the face of restricted supply, the latest indicator that Oil markets are not yet fully balanced.

Prices fell, however, after news that Iran and the EU were set to return to the negotiating table over the nuclear accord. This means more could be arriving on the market soon, albeit the negotiations’ success is far from straightforward for Oil  dealers. Meanwhile, according to another analyst, markets will stay volatile until OPEC+ intervenes.

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