Cushing crude oil inventories
Market surveys estimate that Cushing crude oil inventories rose between April 28 and May 5, 2017. A rise in crude oil inventories at Cushing could pressure US crude oil (DIG) (USL) (PXI) prices. Lower crude oil prices could have a negative impact on the earnings of crude oil producers like ConocoPhillips (COP), Carrizo Oil & Gas (CRZO), and PDC Energy (PDCE).
EIA’s crude oil inventory report
On May 10, 2017, at 10:30 AM EST, the EIA (U.S. Energy Information Administration) will release its crude oil inventory report for the week ending May 5, 2017.
For the week ending April 28, 2017, the EIA reported that Cushing crude oil inventories fell by 0.7 MMbbls (million barrels) to 66.7 MMbbls in the previous week. Inventories are down 1.3% week-over-week, but rose 0.6% year-over-year. Cushing crude oil inventories fell for the third straight week.
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.
As you can see in the above graph, crude oil (BNO) (UCO) (FXN) prices and inventories have an inverse relationship. Cushing crude oil inventories hit the highest level of 69.4 MMbbls in the week ending April 7, 2017. Inventories have risen by ~8 MMbbls, or ~12.7%, in the last 23 weeks. Near-record Cushing crude oil inventories could pressure crude oil prices.
Next, we’ll analyze the US crude oil rig count last week.