Cushing Inventories: Analyzing Crude Oil Futures’ Rally

Gordon Kristopher - Author

Nov. 14 2017, Updated 12:15 p.m. ET

Cushing inventories 

Cushing, Oklahoma, is the biggest crude oil storage hub in the US. It’s also the delivery point for the crude oil futures trading in NYMEX. A market survey estimated that the crude oil inventories at Cushing would have risen on November 3–10, 2017. Cushing crude oil inventories are at the highest level since May 26, 2017.

High crude oil inventories at Cushing are bearish for oil (USO) (DTO) (UCO) prices. Lower oil prices have a negative impact on energy producers (FENY) (IXC) like BP (BP), Contango Oil & Gas (MCF), Chevron (CVX), and Goodrich Petroleum (GDP).

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EIA’s Cushing inventories 

The EIA (U.S. Energy Information Administration) estimates that Cushing’s crude oil inventories rose by ~720,000 barrels to 64.5 MMbbls (million barrels) on October 27–November 3, 2017. The inventories have risen by ~6,021,000 barrels or 10.3% from the same period in 2016.

EIA’s US crude oil inventories 

The EIA added that US crude oil inventories rose by 2,237,000 barrels, to 457.1 MMbbls on October 27–November 3, 2017. The inventories have fallen by 27.9 MMbbls or 5.7% year-over-year.

Impact of US and Cushing crude oil inventories  

The inventories at Cushing rose by ~8,700,000 barrels or 15.6% in the last 15 weeks. Likewise, US crude oil inventories are 15% or 59.4 MMbbls above their five-year average for the week ending November 3, 2017. High crude oil inventories could limit the upside for crude oil (DBO) (DWT) prices.

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


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