Will Cushing Inventories Cap the Upside for Crude Oil Futures?



Cushing inventories 

In the US, Cushing is the largest crude oil storage hub. The market expected that Cushing’s crude oil inventories would rise on October 20–27, 2017. Cushing oil inventories are near a five-month high.

High inventories at Cushing are bearish for oil (OIL) (UCO) (USL) prices. Lower oil prices impact oil and gas producers (FXN) (FENY) like Stone Energy (SGY), Noble Energy (NBL), Anadarko Petroleum (APC), and SM Energy (SM).

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EIA’s Cushing inventories  

The EIA (U.S. Energy Information Administration) estimates that Cushing’s crude oil inventories fell by 237,000 barrels or 0.4% to 63.7 MMbbls (million barrels) on October 13–20, 2017. However, the inventories rose by 4,387,000 barrels or 9.2% from the same period in 2016.

EIA’s US crude oil inventories 

The EIA estimates that nationwide crude oil inventories rose by 856,000 barrels to 457.3 MMbbls on October 13–20, 2017. US crude oil inventories are near a three-week high. Nationwide crude oil inventories have fallen by 10.8 MMbbls or 2.3% year-over-year.

Impact of US and Cushing inventories

Nationwide crude oil inventories were 16.7% above the five-year average for the week ending October 20, 2017. The inventories at Cushing have risen by 7,205,000 barrels or 12.7% in the last ten weeks.

High US and Cushing inventories could limit the upside for crude oil (SCO) (USO) prices. Moves in oil prices impact energy producers (IEO) (XES) like Stone Energy and SM Energy.

In the next part, we’ll discuss how the US oil rig count impacts oil prices.


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