All eyes in the US oil market are currently focused on the small town of Cushing, Oklahoma, located 70 miles northeast of Oklahoma City. Available capacity at one of the world’s largest crude oil storage hubs is filling up fast and that has considerable market implications because Cushing is the delivery point for US benchmark WTI crude, which is priced for Nymex contacts and stored in massive tank farms on the town’s outskirts.

“The U.S. oil market is currently in “contango,” meaning spot prices are well below WTI futures contracts for the coming months. This condition makes it more profitable for energy companies and traders to buy crude at the current price, store it in tanks and deliver at a later date,” Morgan Brennan and Justin Solomon explain in a recent CNBC article.

That trading strategy is viewed as less risky when executed at Cushing due to robust pipeline capacity, transparency given Nymex contract association and ample storage space operated by major industry players.

Read the entire article and watch a short video with a report from Cushing on CNBC here.