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Cushing Crude Oil Inventories Fell for the Second Straight Week

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Cushing crude oil inventories  

Market surveys estimate that Cushing crude oil inventories rose on April 21–28, 2017. A rise in crude oil inventories at Cushing could pressure US crude oil (IXC) (IEZ) (SCO) prices.

Lower crude oil prices will have a negative impact on crude oil producers’ earnings such as Swift Energy (SFY), Continental Resources (CLR), Hess (HES), and Denbury Resources (DNR).

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EIA’s crude oil inventory report 

On May 3, 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 28, 2017.

For the week ending April 21, 2017, the EIA reported that Cushing crude oil inventories fell by 1.2 MMbbls (million barrels) to 67.4 MMbbls—compared to the previous week. Inventories fell 1.8% week-over-week, but rose 1.7% 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 (XLE) (XOP) (USO) 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 ~9 MMbbls, or ~14%, in the last 22 weeks. Near-record Cushing crude oil inventories could pressure crude oil prices.

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

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