Each day some 900,000 oil futures and options contracts are traded on the New York Mercantile Exchange (CME). The oil at Cushing is what’s bought and sold. The town’s hundreds of storage tanks are the country’s biggest bank vault of oil. And it’s getting bigger. In September 2008 there were fewer than 15 million barrels of oil parked there. Today there are 44 million, 16 million more than in January.
The race is on to get the oil out of Cushing. Pipeline companies are pushing to build new pipes and, in some cases, reversing the flow of existing ones. For 17 years, the 500-mile-long Seaway Pipeline pumped imported crude from the Gulf Coast into Cushing. In May it was reversed, and now Seaway pumps 150,000 barrels a day south to the refiners on the Gulf Coast. TransCanada (TRP), based in Calgary, is spending $2.3 billion to extend its Keystone Pipeline south of Cushing. (Its Keystone XL pipeline still awaits approval.) When completed next year, it’ll move 700,000 barrels a day.
Click on graph below to enlarge schematic of major pipelines in and out of Cushing.