Crude oil inventories at storage facilities in Cushing, Oklahoma, fell below 20 million barrels during the week ending June 19 and remained there through the week ending July 10, according to the U.S. Energy Information Administration’s Weekly Petroleum Status Report. The prolonged dip prompted the EIA to publish a public explainer on “tank bottoms,” the minimum volumes of crude that must remain in storage infrastructure to keep pumps running and pipelines supplied.
What tank bottoms are and why they matter
Storage facilities for crude oil and petroleum products require a minimum volume of product in their tanks and pipe infrastructure to remain operational, which can vary between different storage facilities or tank systems. If storage levels fall below their minimum volume, pump suction can become ineffective and storage facilities cannot function. These minimum volumes are sometimes called tank bottoms.
Tank bottoms are a part of what distinguishes working storage capacity from shell capacity.
Shell capacity, in general, refers to the total volume of material that might be held in a given storage facility by design. Working storage capacity, on the other hand, refers to the maximum safe fill volume of storage available, minus the tank bottom capacity. In practical terms, a facility that appears to still hold crude oil may be functionally unable to deliver it once stocks fall to that floor.
Storage facilities must generally operate within their working storage capacity limitations, which prevents inventories of crude oil and other products from truly falling to zero under normal conditions. This means not every barrel counted in inventory is necessarily accessible.
In extreme cases, an inventory facility may be unable to provide a product even though it is not technically empty, because it is effectively at the bottom of its working storage capacity.
Brent-WTI spread turns negative as Cushing tightens
In mid-June when storage at Cushing fell below 20 million barrels, the spot price differential between international benchmark Brent crude oil and U.S. benchmark West Texas Intermediate (WTI) priced at Cushing fell just below $0 per barrel.
The five-day rolling average differential became negative from June 18 to June 24, and again from July 2 through July 8. The negative differential occurred as the WTI-Cushing price increased above the Brent spot market price, putting the spread at its lowest point since January 2022.
The relatively high WTI-Cushing price suggests that recent low inventory levels may be near tank-bottom levels, contributing to extreme tightness for Cushing storage operators and the mid-Continent crude oil market.
The Brent-WTI spread is closely watched by traders because it signals whether U.S. barrels are competitive for export. A negative spread, with WTI trading above Brent, reflects localized supply stress at the hub rather than a global glut.
Cushing serves as the designated physical delivery point for WTI futures contracts traded on NYMEX, making its inventory level one of the most market-sensitive data points in U.S. energy. The hub connects production areas such as the Permian and Bakken to Midwest and Gulf Coast refineries and export terminals that set records as recently as April.
EIA pilot study aims to pin down operational minimums
The EIA is currently reviewing the results of a pilot study to better understand the minimum working inventory levels at select petroleum inventory facilities. The agency has not yet published specific tank-bottom thresholds for Cushing or other hubs, meaning the 20-million-barrel level is being used as a practical benchmark rather than a confirmed operational floor.
The episode underscores how the headline inventory number reported each week can overstate accessible supply. Traders, refiners, and policymakers who rely on Cushing stocks as a proxy for market tightness must now account for the possibility that a portion of reported barrels cannot be moved.
Low stocks at Cushing tighten physical supply signals and influence regional price differentials. They also affect the futures curve structure and can curb exports as arbitrage opportunities narrow and operational constraints increase.
The EIA’s record U.S. crude output of 13.6 million barrels per day in 2025, the highest annual figure ever recorded, has not prevented the drawdown at Cushing, with analysts pointing to strong export demand and refinery pull as the primary drivers of the inventory decline. The agency will continue publishing weekly Cushing stock data through its Weekly Petroleum Status Report, which remains the primary official source for monitoring whether inventories recover above the tank-bottom threshold in the coming weeks.
