Cushing Stocks & Canadian Crude

Mobius Intel Brief:

DoE-reported Cushing crude inventories sank to 22.7 MMb in the seven days ending September 13, bringing Cushing’s Y/Y change to -190,000 barrels and falling into the seasonally adjusted bottom decile for data since 2011.

While the hub’s inventories began the year at historically low seasonal levels, fill rates gathered headwinds after the May 1 commercial start of Canada’s long-delayed TMX pipeline.

• According to vessel-tracking data compiled by Vortexa, exports from Canada’s west coast gained by approximately 27.99 MMb between June and mid-Sep compared to the four months before TMX started operations. (~355-400 kbpd)

Still, Canada’s west coast export growth have not caused declines in total US imports of Canadian crude as many headlines feared.

• This week’s DoE data shows imports of Canadian barrels remain elevated versus 2023 and the 2011+ seasonally adjusted 95th percentile — a trend that began in earnest with the TMX start date.

As outlined in Daily Market Updates this spring, PADD 5 imports gained alongside Canada’s new westbound pipeline capacity.

• The latest DoE data shows PADD 5 (West Coast) imports increased rapidly alongside the TMX start date, surging well beyond the 2011+ seasonally adjusted 95th percentile to 1.63 MMb/d in the final week of June.

The ~375 kbpd flowing through the TMX pipeline since May have had a modest impact on PADD 2 imports, which averaged +148.5 kbpd Y/Y growth in the first three months of TMX operations.

• Canadian barrels accounted for 98% of total PADD 2 imports in January 2024. That share increased to 99.1% in June.

• In the seven weeks since August 1, PADD 2 imports averaged 2.841 MMb/d or -25 kbpd versus the same period in 2023.

While beyond the scope of this Intel Brief, changes to US imports from the northern border contrast against trends in imports from Mexico, OPEC, and South America. Interested readers can request a brief data deck on these flows from the research desk.

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