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Cushing Crude Oil Inventories Hit a New Record

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Cushing crude oil inventories 

Market surveys estimate that Cushing crude oil inventories rose between March 31, 2017, and April 7, 2017. A rise in crude oil inventories at Cushing could pressure US crude oil (IXC) (IYE) (BNO) prices.

Lower crude oil prices will have a negative impact on crude oil producers’ earnings such as Occidental Petroleum (OXY), Synergy Resources (SYRG), and Goodrich Petroleum (GDP).

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EIA’s crude oil inventory report 

On April 12, 2017, at 10:30 AM EST, the EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending April 7, 2017.

For the week ending March 31, 2017, the EIA reported that Cushing crude oil inventories rose by 1.4 MMbbls (million barrels) to 69.1 MMbbls—compared to the previous week. It’s the highest point ever. Inventories rose 2.1% week-over-week and 4.3% year-over-year.

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.

Impact 

As you can see in the above graph, crude oil (VDE) (IEZ) (PXI) prices and inventories have an inverse relationship. Cushing crude oil inventories have risen by ~10.4 MMbbls, or ~17%, in the last 19 weeks. Record Cushing crude oil inventories could pressure crude oil prices to fresh lows.

Next, we’ll analyze the US crude oil rig count last week.

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