Crude oil prices are once again following the path of least deja vu resistance this morning. Having spiked into NYMEX close on Friday (exactly as they did following the rig count data the previous week), WTI is back to a $48 handle this morning following news that Saudi Arabia has increased production to its higest level since 2013. Iraq (another OPEC nation) stirred the pot further by forecasting increased supplies in the next month. This comes as US production hits record highs and vital Oklahoma storage tanks will fill up even sooner than expected, driving the "JK" spread above $2.50 (April delivery drastically cheaper than May). As on analysts noted, as "Cushing continues to fill massively, we could see a '3' handle on WTI." As Ransquawk notes, the latest survey data showed that Saudi Arabia’s output had increased to its highest level since Sep. 2013. Furthermore, OPEC production output was at 30.6mln bpd in February as OPEC leader Saudi Arabia increased production by 130,000bpd to 9.5mln bpd. Iraq exported more than 2.5mln bpd in February and expects to export more than 3mln bpd this month. As Reuters reports, the market is flashing warning signs that vital Oklahoma storage tanks will fill up even sooner than expected... While benchmark U.S. crude oil futures CLc1 still appear to be holding firm after trading at around $50 a barrel for the past month or so, the spread between first- and second-month oil futures collapsed last week, with prompt prices diving by more than $1 to their deepest discount in four years. Shorthanded as "JK" in market jargon, U.S. West Texas Intermediate for April delivery (known as "J") were $2.38 a barrel cheaper than those for May ("K") on Friday, a gap that likely signals the early onset of another milestone in the great oil supply glut, running out of space in Cushing, Oklahoma, delivery point for the New York Mercantile Exchange contract. "Cushing is filling faster than we had expected back in January," said Michael Cohen, head of energy commodities research at Barclays. "We feel that we may break the $44 level, we might even see a $3 handle," said Tariq Zahir, an analyst at Tyche Capital Advisors. "Maybe not next week, but Cushing continues to fill massively." But as traders know, timing is everything, and it's unclear whether fundamentals will change quickly or significantly enough to prevent another lurch lower. * * * Perhaps this sums the situation up best... "What happens to a barrel of crude oil if no one wants it and no one can even store it?" asked Walter Zimmerman, chief technical strategist for United-ICAP. "How do you even value that crude?"