uploads/2015/11/crude-oil-cushing-stocks1.png

Cushing Crude Oil Stocks and Oil Prices Mirror Each Other

By

Updated

Cushing crude oil stocks 

On November 5, 2015, Genscape reported that crude oil stocks at Cushing rose by 713,000 barrels for the week ending November 3, 2015. Cushing, Oklahoma, is the delivery point for crude oil futures contracts trading in NYMEX. It’s also the largest storage hub in the US. The estimates of rising crude oil stocks in Cushing will negatively influence crude oil prices.

Article continues below advertisement

EIA’s report on Cushing crude oil stocks 

The EIA (U.S. Energy Information Administration) reported that crude oil stocks at Cushing fell by 212,000 bpd (barrels per day) to 53.122 MMbbls (million barrels) for the week ending October 30, 2015. Likewise, the stocks fell by 785,000 bpd for the week ending October 23, 2015. Crude oil stocks at Cushing fell for the third consecutive week. The fall in Cushing stocks caused crude oil prices to fall for the second day in a row. New pipeline infrastructure coming online led to the fall in crude oil stocks.

In contrast, nationwide crude oil stocks rose by 2.8 MMbbls to 482.8 MMbbls for the week ending October 30, 2015. Crude oil stocks rose due to a slight increase in the US production for the week ending October 30, 2015. The nationwide crude oil stocks rose for the sixth consecutive week. The US crude oil stocks are 27% more than the level of 380 MMbbls in 2014. Crude oil stocks are at record levels during this period of the year in the last 80 years. The rising nationwide inventory and Cushing crude oil stocks will put downward pressure on crude oil prices.

The catastrophic fall in crude oil stocks will impact oil producers’ profitability like Marathon Oil (MRO), Murphy Oil (MUR), Hess (HES), and Pioneer Natural Resources (PXD). The ups and downs in the crude oil market impact ETFs like the PowerShares DWA Energy Momentum ETF (PXI) and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).

In the next part of this series, we’ll discuss the crude oil rig count.

Advertisement

More From Market Realist