After adding roughly 100 million barrels of crude stocks in 2015, the high level of supply in the US continues to bubble over into 2016, according to Greg Haas, director of integrated oil and gas at Stratas Advisors.

“We import roughly 650,000 barrels a day of light crude. That light crude is the kind we have sitting in our storage tanks,” Haas said. Compared to five-year averages, the US had roughly 130 million more barrels in commercial storage at year-end 2015, he added. “That’s over 200 days’ worth of imports sitting in storage. So that’s an epic overhang.”

With refineries at peak ─ 91-plus percent for the year ─ exports are the only other option aside from cutting drilling, which has already happened, according to Haas.

“We’ve come off of zero [exports] in the last couple of years. We’re certainly exporting some light crude oil to Canada, which was always allowed. “We began exporting some processed condensate and crude to some new nations once that became possible through Enterprise Products, Pioneer and others,” he said. “At year-end last year, we were given the gift of a new regulatory allowance for crude exports without even having to process it. So that will possibly help some going forward as long as it makes economic sense.”

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