Cushing, Oklahoma: The Oil Hub Behind WTI

Why WTI is priced at Cushing

The NYMEX light sweet crude oil futures contract (ticker CL) is physically delivered. A buyer who holds a contract at expiry receives 1,000 barrels of crude in Cushing, transferred by pipeline or in-tank to a facility there. The contract was launched in 1983 and Cushing was chosen because it was already a junction of pipelines carrying crude from Texas, Oklahoma and Kansas to Midwest refineries. Delivery at one place forces futures and physical prices in Cushing to converge at expiry, so the hub's supply and demand feed directly into the WTI crude oil price.

The town itself has fewer than 10,000 residents, but tank farms owned by companies including Enbridge, Plains All American, Enterprise Products and others surround it. Pipelines bring crude in from the Permian Basin, the Bakken, Oklahoma and Canada, and send it out to refineries in the Midwest and to the Gulf Coast for export.

Tank bottoms: why low stocks are a risk

A tank cannot be emptied completely. Some crude must remain as "tank bottoms" to keep floating roofs and pumps working, and operators need minimum volumes to blend crude to pipeline specifications. That is why working capacity is about 20 million barrels lower than shell capacity in the EIA data. Analysts commonly treat a level around 20 million barrels of reported stocks as the practical floor for smooth operations.

In 2026 Cushing came close to that level. Stocks fell to 18.6 million barrels in the week ending 24 July 2026, the lowest of the year, as U.S. crude was pulled to the Gulf Coast for export to replace lost Middle East barrels. When Cushing is that tight, the front WTI futures month trades at a premium to the second month (backwardation), because anyone short a contract near expiry must find physical oil in Cushing to deliver.

2011: the Cushing glut and the Brent-WTI spread

From 2010 rising output from North Dakota's Bakken and Canadian oil sands flowed south to Cushing faster than pipelines could take it on to the Gulf Coast. Stocks built up, WTI fell far below seaborne crude, and the Brent-WTI spread averaged $16.38 per barrel in 2011 and $17.58 in 2012, according to EIA spot data. For most of the previous decade WTI had traded close to or above Brent. The spread narrowed only after the Seaway pipeline was reversed in 2012 to carry crude from Cushing to the Gulf Coast and new export routes were built. In 2015 the US also lifted its ban on most crude oil exports.

2020: storage limits and negative prices

In April 2020 pandemic lockdowns cut fuel demand faster than producers could shut wells. Crude flowed into Cushing, and traders feared that remaining tank space had been leased. Holders of the expiring May 2020 contract who could not take delivery had to sell at any price. On 20 April 2020 the May WTI contract settled at −$37.63 per barrel, the only negative settlement in its history. Brent, which is cash-settled, stayed positive. The episode showed that physical delivery at a single storage hub can produce extreme price moves at expiry. The full story is on the negative oil prices 2020 page.

Cushing stocks over time

How to follow Cushing data

• EIA, Wednesday 10:30 a.m. ET: the official weekly Cushing stock figure in the EIA Weekly Petroleum Status Report.
• API, Tuesday about 4:30 p.m. ET: the industry estimate in the API crude inventory report.
• Private estimates: satellite and storage-monitoring firms publish Cushing estimates earlier in the week for subscribers.
• The WTI calendar spread: the price gap between the first and second WTI futures months is the market's real-time verdict on Cushing tightness. A widening premium for the front month signals falling stocks. See contango and backwardation.