Just reading the cushing near capacity story again and one thing hit me and that was - we (aussie oilers) don't export to the US - so their WTI is going down quicker than Brent due to things like their main storages at Cushing being close to full. Here is the rub though Cushing is holding mainly US & Canadian production so when its full the only thing producers can do is export the oil being produced or turn off the taps in the US/Canada that feed into Cushing. With the rest of the world already at a glut as well you can't just say here take 20million barrels in 5 minutes - we need the room, it doesn't work that quick - yes spot prices would collapse but that oil would be hard to get out given the US has only just lifted the export ban.
The point I'm trying to make is - in the short term the best thing that could happen to the over production is if US storages (Cushing) are full.
A lot of thick Heavy Sour from Canada is thought to be making up a good % of whats in storage at Cushing.
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Just reading the cushing near capacity story again and one thing...
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