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Will Cushing Crude Oil Stocks and API Data Mirror Each Other?

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Cushing crude oil stocks  

Genscape estimates that the crude oil stocks at Cushing, Oklahoma, will rise by 1.1 MMbbls (million barrels) for the week ending October 9, 2015. The mammoth rise in the crude oil inventory will weigh on crude oil prices. Last week, the EIA (U.S. Energy Information Administration) published that crude oil stocks at Cushing, Oklahoma, rose by 0.1 MMbbls to 53 MMbbls for the week ending October 2, 2015. Cushing is the largest oil storage hub in the US. The rise or fall in Cushing’s inventory has a psychological impact on crude oil prices.

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API data  

The API (American Petroleum Institute) will release its weekly crude oil inventory report on October 14, 2015. Last week, crude oil stocks fell by 1.2 MMbbls for the week ending October 2, 2015, according to the API’s reports. The EIA’s (U.S. Energy Information Administration) weekly US commercial crude oil inventory report follows the API data. The EIA is scheduled to release its petroleum status report on October 15, 2015. Last week, crude stocks rose by 3.1 MMbbls to 461 MMbbls for the week ending October 2, 2015.

Market surveys from Bloomberg project that the crude oil inventory could rise by 2.6 MMbbls for the week ending October 9, 2015. During the same period, gasoline and distillate stocks are expected to fall by 1.8 MMbbls and 0.57 MMbbls. The refinery utilization is expected to fall by 0.5% to 87% for the same period. The consensus of rising crude oil stocks implies that supplies are rising and demand is slowing. The rising stocks will add to the oil market glut and negatively influence crude oil prices.

The lower crude oil prices impact oil and gas producers’ profitability like Newfield Exploration (NFX), Noble Energy (NBL), and Anadarko Petroleum (APC). These companies’ crude oil production mix is more than 41% of their total production. In contrast, falling crude oil prices benefit ETFs like the ProShares UltraShort Bloomberg Crude Oil ETF (SCO). The volatility in the crude oil markets impacts ETFs like the iShares U.S. Oil & Gas Exploration & Production ETF (IEO).

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