June 22 (Reuters) - The United States added 34 million barrels of crude oil storage capacity from September 2015 to March 2016, the largest expansion since the Energy Information Administration began tracking the data in 2011, it said on Wednesday.
Capacity has grown as oil inventories in the U.S. swelled over the last two years as a result of a massive glut, which also led to prices crashing to 12-year lows early in 2016.
Inventories are up more than 15 percent since the end of September. This has pushed crude oil storage capacity utilization to a near record high of 73 percent for the week ending June 10, the EIA said.
However, crude stocks have begun to drop in the last two months largely due to reduced output by U.S. producers, rising demand and reduced supply, especially in crude from Canada following the May wildfires.
Overall, crude inventories have fallen by about 12.8 million barrels since the last week of April. For the week ended June 17, inventories fell by 917,000 barrels, compared with expectations for an decrease of 1.7 million barrels. It was the fifth consecutive week of drawdowns.
Despite the rise in storage capacity and falling inventory, the utilization rate at Cushing, Oklahoma, the delivery point for the NYMEX WTI futures contract, averaged 87 percent over the past four weeks, EIA said, compared with 81 percent a year ago.
The largest oil storage capacity expansions since September were in the Midwest and Gulf Coast regions, which added 19 million barrels and 13 million barrels, respectively, according to the EIA.
Storage capacity at Cushing expanded 1.5 million barrels. Traders have rushed to secure space at Cushing so they can store oil purchased at low prices and sell it later at a profit because the oil market has been in a structure known as contango.
The EIA measures crude oil storage capacity twice yearly.
(Reporting by Devika Krishna Kumar in New York; Editing by Alden Bentley)
Copyright 2016 Thomson Reuters. Click for Restrictions.
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