Will Oil Price Collapse Because We're Out Of Room To Store It?

Oil prices have dropped precipitously over the past few months, and while that's led to lower gas prices, it's also creating a somewhat unusual problem.

No matter how much or little oil the national economy is consuming, it's still pumped out of the ground in massive quantities.

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So what happens when there is no longer room to store the excess oil?

A price collapse, according to a report recently published in The Washington Post.

The artice claims the U.S. is already running out of room to store oil, and that could cause prices to drop even more over the next few months.

For the past eight weeks, the U.S. has been producing and importing 1.1 million barrels more than it's consuming.

That has pushed supplies to their highest level in 80 years, according to the U.S> Department of Energy (DoE).

At this rate, storage tanks at the facility in Cushing, Oklahoma, that serves as the nation's oil-trading hub will reach their operational limits--known as "tank tops"--by April.

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One reason for this is that U.S. oil production has risen sharply lately. Companies only recently began cutting back, and the impact from that won't be felt until later in the year.

Much of the oil being produced is also light, sweet crude, which most U.S. refineries aren't equipped to handle. Exports are also restricted by Federal law.