Oil price news: Oil traders struggle as decades-old signal of U.S. market weakens

​The biggest oil-storage hub in the U.S. — a massive network of tank farms known as the “Pipeline Crossroads of the World” — is rapidly losing its primacy as a signal for domestic supply and demand.

For decades, traders watched inventory levels at Cushing, Oklahoma, to track U.S. crude balances, but the US's increasing integration into the global oil market is weakening the complex's relevance. The US has been shipping growing volumes of crude abroad since Washington lifted an export ban in 2015, and earlier this year American oil was for the first time included in the calculation of Dated Brent, the world's most important physical oil benchmark. Both of those factors are shifting traders' attention to the country's main export center on the Gulf Coast. 

In perhaps the most vivid sign of Cushing's fading importance, US oil futures are trading in a bearish structure that signals ample supplies, despite inventories at Cushing only just building back up after dwindling close to levels that threaten the tanks' ability to operate normally. 

“The U.S. market is much more waterborne than in the past,” said Vikas Dwivedi, a global oil and gas strategist for Macquarie Group. “Cushing matters only at the tails — either very empty or very full —  the middle 80 per cent is probably not as impactful anymore.”