The oil is arriving here from Canada, where production from oil sands is increasing, and from places like North Dakota, where drilling has been steadily increasing to meet demand.

So with all the oil sloshing around in Cushing, why have NYMEX crude prices been flirting with $100 a barrel?

Jim Burkhard, Managing Director of the Global Oil Group at IHS/CERA says Cushing is no longer representative of the broader oil market.

"Cushing is not only disconnected from the global crude oil market, it is really disconnected from the U.S. crude oil market as well," Burkhard said. "Cushing reflects demand and supply fundamentals in a relatively small part of the U.S."

The problem is that while it is relatively easy to get oil to Cushing, it is not as easy to get it out. There are no pipelines from Cushing to the large refineries on the Gulf coast, though there are several proposals, including one by Enbridge, to build one. In the meantime, Cushing is something of a bottleneck.

"What needs to happen is new pipeline capacity that delivers oil from the Cushing area to the U.S. gulf coast," Burkhard said.

Even so, oil from Cushing trades at a significant discount to oil from other areas, such as the North Sea, where Brent Crude trades at a significant premium to its U.S. counterpart.

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