The Wall Street Journal reports: In a world awash in crude, oil producers and traders are facing a billion-barrel conundrum: where to put it all.

U.S. crude-oil supplies are at their highest level in more than 80 years, according to data from the Energy Information Administration, equal to nearly 70% of the nation’s storage capacity. A U.S. storage hub in Cushing, Okla., is expected to hit maximum capacity this spring. While estimates are rough, Citigroup Inc. believes European commercial crude storage could be more than 90% full, and inventories in South Korea, South Africa and Japan could be at more than 80% of capacity.

The danger of running out of places to stash crude: Some analysts predict prices, already down 50% since June, could spiral even lower as producers sell oil at a discount to the few remaining buyers with room to store it. Consumers, though, would continue to be big winners as refineries convert an ocean of crude into gasoline and other fuels. [Continue reading…]