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How Falling Cushing Crude Inventories Are Impacting Oil Prices


Nov. 20 2020, Updated 5:11 p.m. ET

Cushing crude oil inventories  

Market data company Genscape reported that Cushing crude oil inventories fell by 714,282 barrels between August 27 and August 30, 2016. A decrease in crude oil inventories at Cushing will support crude oil prices. High crude oil prices positively impact the earnings of crude oil and gas producers such as WPX Energy (WPX) and QEP Resources (QEP).

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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 2 on September 8, 2016, at 10:30 AM EST.

For the week ending August 26, 2016, the EIA reported that Cushing crude oil inventories fell by 1,000,000 barrels to 63.9 MMbbls (million barrels) compared to the previous week. Cushing crude oil inventories were 11.5% more than they were in the corresponding 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 Pressured Crude Oil Prices.

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 by 6.4% from their peak levels. Near-record Cushing crude oil inventories could pressure crude oil prices. Lower crude oil prices have a negative impact on the profitability of crude oil and gas producers such as WPX Energy (WPX) and QEP Resources (QEP).

The ups and downs in crude oil prices impact funds such as the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), the Vanguard Energy ETF (VDE), the Fidelity MSCI Energy (FENY), and the ProShares Ultra Oil & Gas (DIG).

Next, we’ll analyze the US crude oil rig count for the week ending September 2, 2016.


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