Cushing: Oil Hub of the World

Cushing, a small town of seven thousands in the middle of Oklahoma, used to be an oil town with several refineries. However, after a decline in oil production its centralized location and  dozens of pipelines made it a good point  to store oil.

Today, it is the largest crude oil storage hub in the USA and an important price settlement point for West Texas Intermediate (WTI) on the New York Mercantile Exchange (NYMEX). It is the officially designated delivery point in the US where the physical delivery of the oil takes place, making it the most significant trading hub in crude oil in North America.

Tank farms around Cushing are owned by major companies like Magellan Midstream Partners and Enbridge Energy Partners. Currently, there is about 300 steel oil storage tanks and every day up to 6 million barrels of oil flows through Cushing’s 13 major pipelines in or out of the tanks. As new pipelines went online in 2014 and 2015, crude oil inventories in Cushing further expanded.

At the moment, markets are recovering from a historic supply glut. Recently, it was reported that the glut will probably last until mid-2017 as markets will take time to absorb excess crude in storage and rebalance supply and demand for oil.

Cushing Tank Farms

Satellite imagery helps analysts to make more accurate inferences about the location of physical supply and demand. Monitoring shadows on the inside of the the tanks can help determine how high the floating lid is and to what extent the tank is filled.

Following satellite imagery, capturing various tank farms at Cushing, enables not only to examine changes in levels of oil supply but also to monitor activity and structural changes at tank farms, such as construction of new storage tanks and pipelines.

Note: 6 new storage tanks were added between 2011 and 2013. 6 more were in construction in November 2013.

Note: Construction of new oil storage facilities between 2011 and 2013. The satellite imagery shows a high level of on-site construction activities since 2013.

Note: Construction of a new oil storage tank between 2011 and 2013. The satellite imagery also captures traces of former storage tanks.

Note: The changes in length of shadows on the inside of storage tanks. The shorter the shadow, the more oil a tank stores.

Note: The construction activity on the site.

Note: Demolition of oil storage tanks.