U.S. Oil-Storage Glut Expands Faster Than Expected

[Purveyor]

We're running out of room for all this oil

by Tom Randall
10:57 AM EDT March 18, 2015

America has raised the roof again.

That's what the roofs of oil storage tanks do -- they rise and fall depending on the volume of oil inside. And America's oil in storage just hit a new record after surging for the 10th consecutive week.

Stockpiles rose 9.6 million barrels, or 2.1 percent, to 458.5 million barrels last week, the EIA reported today. Analysts had expected an increase of 4.4 million barrels. The amount of oil the U.S. is cranking out also rose, for the sixth consecutive week, to a rate of 9.42 million barrels a day.

Oil investors have been glued to the levels of storage tanks, which have been climbing steadily since the oil-price crash started last year. American stockpiles are more than 25 percent above their five-year average. Inventories aren't likely to max out, but even the possibility of that happening is adding pressure to an oversupplied oil market.

U.S. inventories will probably continue to rise for the next few months, as refineries conduct seasonal maintenance and investors hold out for higher prices, according to Bloomberg Intelligence. In addition to traditional storage in tanks represented in today's numbers, drillers have left thousands of nearly finished wells untapped in what's become de facto storage, sometimes known as the fracklog.

Prices are low, storage is filling up, and oil-drilling rigs are being idled at an unprecedented rate. But the U.S. oil boom hasn't slowed yet.

more...

http://www.bloomberg.com/news/articles/2015-03-18/u-s-oil-storage-glut-expands-faster-than-expected

[A HERETIC I AM]

1. FWIW, not all tanks have movable tops.

Most that I've seen in fact have solid tops, so the author is a bit off.
Interesting article, nonetheless

[ND-Dem]

2. Didn't we use to have an oil reserve? How is this different? I remember at some point we

were going to, or did draw down the oil reserve for what seemed a phony reason if I recall right, but why is having more in storage big news? IOW, what's the reason we got rid of it before and are building it up now?