Thomson Reuters today announced that is has signed an agreement with Genscape, the leading global provider of proprietary energy information for commodity and financial markets, to provide Thomson Reuters commodities customers with exclusive redistributor access to Genscapeâs unique mid-week oil storage report for Americaâs top oil storage hub in Cushing, Oklahoma.
Cushing, Oklahoma boasts one of the largest concentrations of crude oil storage tanks in the world and is the delivery point for the physical settlement of the CME/NYMEX crude oil futures contract. Unlike other storage sites, Cushing is some distance from the nearest refinery so oil stored at the site is mainly held for trading rather than operational reasons.
In addition to counting toward total crude oil inventories in the United States â a figure which has a large effect on global crude oil prices â the Cushing storage number is a strong indicator of expectations for future price movements and is the physical yardstick that best reveals the thinking of speculative futures and forward traders. Traders in the international crude markets have over time increased their trading activity around the Cushing oil storage numbers.
The US Energy Information Administration (EIA) has, since 2004, surveyed a number of Cushing storage operators on Fridays, before publishing its data on the following Wednesday at 10:30 am US eastern time. However the EIA data is based on accounting changes, not actual storage meter readings, and is published five days after the survey is completed.
In order to provide the market with a more detailed and timely gauge of the level of Cushing storage, Genscape, in early 2009, started remotely and directly measuring the storage levels. The company takes pictures in the visual and infra-red spectrum of every tank (more than 300 in total) before using proprietary tools to establish the storage level. The Midweek Storage Report data collected on Tuesday is released on Thursday and gives market participants a good indication of what to expect for the following weekâs EIA release days ahead of the rest of the market.
Genscape has recorded an increase in trading activity around the release of its data on Mondays and Thursdays and anticipates a high level of interest in the broader distribution of the midweek number.
Thomson Reuters commodities customers will now have exclusive redistributor access to Genscapeâs midweek figures (measured on Tuesday and released on Thursday). The data will have the most recent total storage, as well as a breakdown by operator. It will also include the change from the previous week, and the change from the Genscape number measured on the previous Friday and published on the previous Monday.
Leigh Henson, Global Head of Oil & Transport, Thomson Reuters, said, âThe addition of this valuable content from Genscape demonstrates Thomson Reuters commitment to provide our clients unique intelligent information and associated tools they need to succeed in today's volatile markets.â
Abudi Zein, vice president, Genscape, said, âWe look forward to working with Thomson Reuters on enhancing market transparency and increasing trading liquidity. We believe our midweek number will allow participants to trade around an accurate, additional data point.â