CVR Refining LP CEO David Lamp said on Thursday that Cushing, Oklahoma, crude storage inventories have fallen to just about the lowest levels the hub can handle.
“Cushing is basically on its heels, maybe one million barrels above. Whatever comes in, comes out. I don’t see that changing any time soon,” Lamp said on an earnings call.
Lamp said the steep backwardation and the wide differentials make it challenging to keep inventories at the storage hub.
The company has space on Enbridge’s Spearhead Pipeline, which brings Canadian crude into Cushing. Instead of running the crude at its refineries, it’s more economical to sell the crude into Cushing, Lamp said.
U.S. crude inventories at Cushing dropped to their lowest levels last week since November of 2014, according to the latest data from the U.S. Energy Information Administration.