Enbridge To Add Additional 1 Million Bbls Oil Storage At Cushing

Enbridge Energy Partners said Friday it will build another 1 million barrels of oil storage capacity at Cushing, Okla., as crude stockpiles in the area hover near record levels.

The additional storage, expanding on previous plans to add 3 million barrels of new tank space, would bring Enbridge's total capacity at Cushing to 18.8 million barrels by the end of 2012, spokesman Larry Springer said. Enbridge is the largest operator of storage at Cushing, with 14.8 million barrels of capacity there.

Enbridge's board of directors approved the additional storage during a meeting on Friday. Several other storage operators at Cushing have also announced plans in recent months to add more storage and accommodate the growing oil flow.

The move should help alleviate the oversupply at Cushing, a critical oil pipeline hub and the delivery point for the main oil futures contract traded on the New York Mercantile Exchange. An influx of oil from the central U.S. and Canada in recent months has led to soaring supply levels at Cushing, depressing the price of the Nymex contract compared with other crude grades and causing many market players to question whether the contract accurately reflects global prices.

On Friday, Nymex June futures settled up 1% at $113.93 a barrel, while Brent futures were trading at $125.95 a barrel.

Oil inventories have held at just over 40 million barrels, a record, since early March, according to the U.S. Energy Information Administration.

-By Dan Strumpf, Dow Jones Newswires; 212-416-2818; [e-mail]