COLUMNOil prices surge as stocks drain away from Cushing: Kemp
US crude oil prices have surged and the futures strip has moved into a sharp backwardation as inventories have drained away from the NYMEX delivery point at Cushing in Oklahoma. Futures prices for crude delivered in October climbed to $90 per barrel on Sept. 14, up from $68 on June 27, as traders anticipated increasing shortages of unrefined petroleum. However, the rapid depletion of inventories at Cushing may be exaggerating the tightness of supplies across the rest of the country and around the world. Hedge funds and other money managers have responded to inventory depletion and escalating prices by reducing former bearish short positions and establishing new bullish long ones in US crude futures and options.
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Frequently Asked Questions
1. Why are oil prices surging?
The article discusses how oil prices are surging due to stocks draining away from Cushing. As stocks decrease, the demand for oil increases, leading to an increase in prices.
2. What is causing the stocks to drain away from Cushing?
The article mentions that the factors causing stocks to drain away from Cushing are not specified. However, it could be due to a decrease in production, an increase in demand in other regions, or other market factors.
3. How does the draining of stocks impact oil prices?
The draining of stocks from Cushing can lead to an increase in oil prices as it indicates a decrease in available supply. When supply decreases, but demand remains stable or increases, prices tend to rise.
4. Are there any other factors influencing oil prices?
The article does not provide any specific information about other factors influencing oil prices. It is essential to consider global economic conditions, geopolitical events, and other supply and demand dynamics.
5. Where can I find more information about this topic?
You can find more detailed information about the surging oil prices and the draining of stocks away from Cushing in the original article "COLUMN-Oil prices surge as stocks drain away from Cushing: Kemp" published on Devdiscourse.