With the United States producing and importing a million more barrels of oil per day than it consumes, the country “is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months,” the Associated Press reported this week.
“If this keeps up, storage tanks could approach their operational limits, known in the industry as ‘tank tops,’ by mid-April and send the price of crude—and probably gasoline, too—plummeting,” Fahey reports.
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“The fact of the matter is we are running out of storage capacity in the U.S.,” Ed Morse, head of commodities research at Citibank, told a recent symposium hosted by the Council on Foreign Relations. Morse said the supply glut could drive oil prices as low as US$20 per barrel.
“At that rock-bottom price, oil companies, faced with mounting losses, would stop pumping oil until the glut eased,” AP explains. “Gasoline prices would fall along with crude, though lower refinery production, because of seasonal factors and unexpected outages, could prevent a sharp decline.” (h/t to Midwest Energy News for pointing us to this story)
