Cushing Inventories: Bullish or Bearish for Crude Oil Prices?

A market survey estimates that Cushing crude oil inventories have risen between September 8 and September 15. Cushing is the largest storage hub in the United States. Any rise in Cushing crude oil inventories should have a negative impact on crude oil (FXN)(FENY)(IXC) prices.

Lower crude oil (VDE)(IYE)(USL) prices have a negative impact on oil and gas producers like the Northern Oil & Gas (NOG), Apache (APA), Noble Energy (NBL), Stone Energy (SGY), and QEP Resources (QEP).

The EIA (US Energy Information Administration) released its weekly crude oil inventory report on Wednesday, September 13. It estimates that Cushing inventories rose by 1,023,000 barrels or 1.7% to 59 MMbbls (million barrels) between September 1 and September 8. However, Cushing crude oil inventories are down 3.1 MMbbls or 5% from the same period in 2016.

The EIA also estimates that US crude oil inventories rose by 5.8 MMbbls (million barrels) or 1.3% to 468.2 MMbbls from September 1 to 8, 2017. However, US crude oil inventories are down 11.2 MMbbls or 2.5% year-over-year.

Cushing crude oil inventories have risen by 3.2 MMbbls or 5.7% in the last eight weeks. They also rose for the third consecutive week. US crude oil inventories rose for the second straight week. Any rise in Cushing and nationwide crude oil inventories could weigh on crude oil (ERY)(ERX) prices.

Next, we’ll analyze how the US crude oil rig count impacts crude oil prices.