WASHINGTON – Crude oil inventories on the U.S. Gulf Coast (USGC) reached a record high of 207.2 million barrels (bbl) on April 11, a result of the continuing strong crude oil production growth, the opening of TransCanada's Marketlink Pipeline and a drop in crude oil inputs at USGC refineries as a result of seasonal maintenance, reports the U.S. Energy Information Administration (EIA) its April 17 “Today in Energy.”

While USGC crude oil inventories typically build during the beginning of the year, EIA says that this year's increase has been particularly notable. “On January 10, USGC inventories were 161.0 million bbl, 1.4 million bbl above the five-year average. Since then, they have increased 46.2 million bbl (29%) to the current level, which is 24.2 million bbl above the previous five-year average and 22.2 million bbl above year-ago levels. Typically over this period, USGG crude oil inventories build only 23.4 million bbl.”

The main driver of recent USGC crude oil inventory, notes EIA, is the start-up of TransCanada's 700,000-bbl-per-day (bbl/d) Marketlink Pipeline, which runs from the Cushing, Oklahoma, storage hub to the Houston, Texas, area. TransCanada completed the first delivery of crude oil via Marketlink to USGC refineries in late January, and crude deliveries via the pipeline could average 525,000 bbl/d in 2014.

Meanwhile, EIA notes that a “seasonal drop in crude oil inputs due to maintenance at USGC refineries resulted in lower demand for crude oil in the past two months.” For the four weeks ending January 17, crude inputs at USGC refineries were 8.3 million bbl/d, which then dropped to 7.7 million bbl/d on average for the four weeks ending March 21, but have increased again in recent weeks. During the same period, crude oil imports actually increased slightly.

Finally, EIA says that additional USGC sources of crude supply are coming from increasing regional production, which has kept inventories high in recent years. In the 106 weeks since March 2012, USGC inventories have been above the previous five-year average in all but seven of those weeks. EIA notes that crude oil production growth in the Midwest has averaged 278,000 bbl/d from March 2012-January 2014. And with more USGC production and transportation of Midwest crude to the region, more storage capacity has been required to meet logistical challenges.