Physical Tightness Crushing Deferred Energy Structure
Updated: May 20
US crude and fuel inventories continue to collapse at a pace well beyond 2022 despite outright energy futures undergoing a violent correction. June WTI expired near $107.77/bbl while July WTI settled near $98.35/bbl, leaving a nearly $9.40/bbl premium for prompt physical crude. That type of structure reflects acute prompt scarcity tied directly to collapsing Cushing inventories, which recently rebounded toward 30 million barrels but still remain historically low versus the 60-70 million barrel levels seen during 2015-2020. Commercial US crude inventories reportedly fell another 7.9 million barrels this week while combined commercial plus SPR inventories dropped 17.8 million barrels. HFI estimates total US liquids inventories near 1.236 billion barrels, already roughly 55-60 million barrels below comparable 2022 levels despite materially higher prices.
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