EIA: Cushing inventories up

Increased U.S. oil production has led to a strong increase in amount of oil stored at the trading hub in Cushing, Okla., the U.S. Energy Department said. The U.S. Energy Department's Energy Information Administration said crude oil storage capacity at the Cushing hub stood at 61.9 million barrels as of March 31, a 13 percent increase from September and a 29 percent increase year-on-year. Cushing serves as the market hub for West Texas Intermediate crude, which serves as the benchmark for crude oil futures contracts traded on the New York Mercantile Exchange. "High inventory levels at Cushing have been a symptom of transportation constraints that have resulted in WTI trading at a discount relative to comparable grades of crude oil since early 2011," the EIA said. It said increased domestic crude oil production in the United States, coupled with higher imports of oil from Canada, has contributed to the increase in inventories at Cushing. Pipeline companies in the United States and Canada have moved to either reverse existing pipeline networks, like the Seaway pipeline, or build new ones, like Keystone XL, to ease the bottleneck at Cushing.