North America Crude Markets short-term outlook: October 2023

In late September, Cushing storage levels dropped within ~1 million b/d of the operational floor following months of steep drawdowns. While Cushing is often discussed in recent years as a mere pass-through to the Gulf Coast, it quickly becomes a central focus in periods of operational extremes and steep forward curve structures. A severe shortage of barrels at the WTI delivery hub typically causes major shifts in regional price differentials and trade flows to maintain operational thresholds, affecting balances in Cushing and all surrounding market regions.