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Cushing Crude Inventories Could Boost Crude Oil Prices

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Dec. 4 2020, Updated 10:52 a.m. ET

Cushing crude oil inventories  

Market data provider Genscape reported that Cushing crude oil inventories fell by 276,000 barrels from September 16–23, 2016. A decrease in crude oil inventories at Cushing will support crude oil prices.

High crude oil prices have a positive impact on crude oil and gas producers’ earnings such as Comstock Resources (CRK), PDC Energy (PDCE), and Triangle Petroleum (TPLM).

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EIA’s Cushing crude oil inventories 

The EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending September 23 on September 28, 2016, at 10:30 AM EST.

For the week ending September 16, 2016, the EIA reported that Cushing crude oil inventories rose by 500,000 barrels to 62.7 MMbbls (million barrels) compared to the previous week. Cushing crude oil inventories were 16.1% higher than they were in the same period in 2015.

Cushing crude oil inventories hit 68.3 MMbbls, the highest point ever, in the week ending May 13, 2016. New pipelines that came online in 2014 and 2015 led to the rise in Cushing crude oil inventories. For more on US crude oil inventories, read US Crude Oil Inventories Hit a 7-Month Low.

Storage capacity  

Cushing, Oklahoma, is the delivery point for crude oil futures contracts trading on NYMEX. It’s also the largest crude oil storage hub in the US. Cushing’s crude oil storage capacity is 73 MMbbls.

High Cushing crude oil inventories  

Cushing crude oil inventories have fallen 8.2% from their peak levels. Falling inventories could support crude oil prices. Higher crude oil prices have a positive impact on crude oil and gas producers’ profitability such as Comstock Resources, PDC Energy (PDCE), and Triangle Petroleum (TPLM).

Uncertainty in crude oil prices impacts funds such as the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the Vanguard Energy ETF (VDE), the Fidelity MSCI Energy (FENY), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), and the ProShares Ultra Oil & Gas (DIG).

Next, we’ll analyze the US crude oil rig count for the week ending September 23, 2016.

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