5 ms·

It’s not that there’s no storage capacity left, it’s that if you have May contracts you are going to pay a big premium to store oil in Cushing as capacity decre

• option_greek 7y ago
  Any idea how much it takes to store oil in Cushing during normal times ?
  • donarb 7y ago
    This article from March 25 states that rates at Cushing more than doubled from 20 cents per barrel per month to 50 cents since February. https://www.reuters.com/article/global-oil-storage/global-oil-storage-fills-to-the-brim-despite-leap-in-costs-idUSL8N2BH3AM https://www.reuters.com/article/global-oil-storage/global-oi...
    • mcv 7y ago
      If storage rate is cents per barrel and barrels cost negative dollars per barrel, is sounds like storage is still very affordable.
      • HighPlainsDrftr 7y ago
        If you have an old oil field that is at end of life, couldn't you pick this stuff up at $-40.00/barrel and pump it back into the empty reservoirs? I'm sure there is regulation against it, but if it was once a production reservoir, why couldn't you store it there? You would have to drill. You wouldn't have to do much at all.
        • semi-extrinsic 7y ago
          You would need a suitable formation in terms of geological properties and then you'd need to drill and complete an injector and a producer well. Best case, you would probably lose half the stuff you're trying to store due to multiphase flow in reservoirs being a total drag. Worst case, the oil you're storing isn't compatible solubility-wise with the residual oil left in the reservoir, and you cause massive asphaltene precipitation and lose your entire storage well.
          • loa_in_ 7y ago
            The fact that such precipitation is a known fact tells me it has been tried before.
        • hermitdev 7y ago
          Can't reply to semi-extrinsic, but it would seem to me, it'd be cheaper to just shut down the originating well.