Oil Prices Hinge On What Happens In One Oklahoma Community

Thursday, November 1st 2007, 5:00 pm
By: News On 6

The price of crude oil has hit a new record. It is just shy of $95 a barrel, and Cushing, Oklahoma plays into the mix. The News On 6’s Latoya Silmon reports fingers may be pointing to Cushing, but Tulsa's SemGroup, one of the major companies with storage there, says they've missed the mark.

It's Cushing's claim to fame.

“It's where all the pipelines come through and provide crude oil to the upper Midwest. Historically we've had 30 to 35 million barrels of storage,” said Kevin Foxx, President/CEO of SemGroup Energy Partners.

Now, that number has dropped to 15 million. Sounds like a lot, but in the oil business, some say that's a low number and it's driving up the cost of crude. Right now, it's around $95 a barrel.

“The fact that inventories are down and prices go up $4, I'm not sure that's all just Cushing,” Foxx said.

Kevin Foxx is the President and CEO of SemGroup Energy Partners. The company has more than four million barrels in Cushing. He says that historically, the Cushing oil facility holds anywhere from 15 to 25 million barrels, so in his opinion Cushing is on track.

“There are four major players in Cushing, the biggest is BP, Inbridge, Plains and us,” said Kevin Foxx, President/CEO of SemGroup Energy Partners. “We own this storage and we store barrels for other people. We don't own the barrels that are in the storage facility. Does Plains own all the barrels that are in their 10 million barrels? I don't know, but I doubt it.”

So he doubts Cushing can take all the blame for the higher crude prices, or that its low inventory will cause you to pay more at the pump.

“I don't think so, but just because the fact that oil is $95 and we're paying $2.70 for gas, as I recall earlier in the summer, when gas was $65, we we're paying $3 for gas.”

Some analysts in New York see things differently. They say there's no denying Cushing's impact on the oil market. It's a hub of activity and the oil Interchange delivers throughout the nation.

Watch the video: Oklahoma's Role In Rising Gas Prices

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10/31/2007 One Oklahoma Town Key To Oil Prices