Cushing Inventories Could Pressure WTI Crude Oil Futures

Gordon Kristopher - Author

Nov. 20 2017, Published 9:31 a.m. ET

Cushing inventories  

Cushing, Oklahoma, is the largest crude oil storage facility in the US. Earlier, a survey of Wall Street analysts estimated that crude oil inventories at Cushing would rise on November 10–17, 2017.

Any rise in Cushing inventories is bearish for oil (OIL) (DWT) (DBO) prices. Lower oil prices have a negative impact on oil producers’ (FXN) (IYE) earnings like Noble Energy (NBL), Newfield Exploration (NFX), Anadarko Petroleum (APC), and Energen (EGN).

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EIA’s Cushing inventories  

The EIA (U.S. Energy Information Administration) estimated that Cushing’s crude oil inventories fell by 1,504,000 barrels to 63 MMbbls (million barrels) on November 3–10, 2017. The inventories fell 2.3% week-over-week but rose by 3,885,000 barrels or 6.5% year-over-year.

EIA’s US crude oil inventories  

The EIA also estimated that US crude oil inventories rose by 1,854,000 barrels to 458.9 MMbbls on November 3–10, 2017. The inventories rose for the second consecutive week. However, US crude oil inventories have fallen by 31.2 MMbbls or 6.3% year-over-year.

Impact of US and Cushing crude oil inventories 

Nationwide crude oil inventories were 15% or ~60 MMbbls above their five-year average for the week ending November 10, 2017. The inventories at Cushing rose by ~6,686,000 barrels or 12% in the last 15 weeks. High nationwide and Cushing crude oil inventories could cap the upside for crude oil (USL) (UWT) prices.

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


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