Cushing crude oil inventories
Market intelligence company Genscape reported that Cushing crude oil inventories fell by 650,000 barrels from October 21–28, 2016. A fall in crude oil inventories at Cushing could support crude oil prices.
EIA’s Cushing crude oil inventories
On November 2, 2016, at 10:30 AM EST, the EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending October 28, 2016.
For the week ending October 21, 2016, the EIA reported that Cushing crude oil inventories fell by 1.3 MMbbls (million barrels) to 58.3 MMbbls compared to the previous week. Inventories are at the lowest level since November 20, 2015. However, Cushing crude oil inventories were 7.8% higher than 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 Limited Crude Oil Prices’ Downside.
Cushing’s 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.
Cushing’s crude oil inventories
Cushing crude oil inventories have fallen 14.5% from their peak levels. Falling inventories could benefit crude oil prices. Higher crude oil prices have a positive impact on crude oil producers’ profitability such as PDC Energy (PDCE), Range Resources (RRC), and Swift Energy (SFY).
Volatility in crude oil prices impacts funds such as the VelocityShares 3x Inverse Crude Oil ETN (DWTI), the Vanguard Energy ETF (VDE), the Direxion Daily Energy Bear 3x ETF (ERY), the PowerShares DB Crude Oil Double Short ETN (DTO), the iShares US Oil Equipment & Services (IEZ), the ProShares UltraShort Bloomberg Crude Oil (SCO), the ProShares Ultra Bloomberg Crude Oil (UCO), and the ProShares Ultra Oil & Gas (DIG).
Next, we’ll analyze the US crude oil rig count for the week ending October 28, 2016.