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Cushing Inventories Decline for the First Time since November 2014

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EIA crude oil stockpile data

The EIA (U.S. Energy Information Administration) reported that weekly crude oil inventories rose by 1.9 MMbbls (million barrels) to 490.9 MMbbls—from 489 MMbbls for the week ending April 24, 2015. Gasoline inventories increased by 1.7 MMbbls from the previous week. In contrast, distillate fuel inventories declined by 0.1 MMbbls over the same period. The current crude oil inventories are more than 23% above the levels last year.

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Cushing inventories decline

US commercial crude oil inventories increased marginally last week. Inventories at Cushing, Oklahoma—the delivery point for US futures—declined for the first time since November 2015. Inventories dropped by 514,000 barrels for the week ending April 24 from the previous week. Inventories declined due to improved demand from refineries.

Weekly US production gained marginally to 9.373 MMbpd (million barrels per day) from 9.366 MMbpd for the week ending April 24, 2015. Over the same period, US crude oil imports decreased marginally by 7.446 MMbpd from 7.765 MMbpd. In contrast, the US dollar declined against the basket of currencies. The dollar index fell by 1% and also supported crude oil prices.

The slowing inventory and US production will continue to support oil prices. In contrast, Saudi Arabia and Russia’s peak production will continue to put pressure on oil prices.

The increase in WTI (West Texas Intermediate) oil prices will benefit crude oil producers like Rosetta Resources (ROSE), California Resources (CRC), and SM Energy (SM). They account for 4.14% of the SPDR Oil and Gas ETF (XOP). The Energy Select Sector SPDR ETF (XLE) and XOP rallied as the crude oil prices increased yesterday. However, the S&P 500 diverged from the oil prices and fell by 0.37% at the close of trade.

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