Cushing Inventories Could Push WTI Crude Oil Futures Higher

Gordon Kristopher - Author

Nov. 27 2017, Published 9:57 a.m. ET

Cushing inventories 

Cushing, Oklahoma, is the largest crude oil storage hub in the US. Market surveys expect that the crude oil inventories at Cushing would have fallen between November 17–24, 2017. Any fall in Cushing inventories is bullish for oil (USL) (DBO) prices.

Any supply outage in the US could cause a decline in crude oil inventories, which is bullish for oil (OIL) (UWT) prices. For updates on the supply outage, read Part 1 of this series.

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EIA’s Cushing inventories 

The EIA estimated that Cushing’s crude oil inventories fell by 1,827,000 barrels or 2.9% to 61 MMbbls (million barrels) on November 10–17, 2017. However, the inventories rose by 2,145,000 barrels or 3.6% from the same period in 2016. Any rise in the inventories is bearish for oil prices. Lower oil prices have a negative impact on energy producers’ (IEO) (FENY) earnings like Bill Barrett (BBG), Noble Energy (NBL), Hess (HES), and Bonanza Creek Energy (BCEI).

EIA’s US crude oil inventories 

US crude oil inventories fell by 1.9 MMbbls to 457.1 MMbbls on November 10–17, 2017. The inventories fell by 31.8 MMbbls or 6.5% from the same period in 2016.

Impact of US and Cushing crude oil inventories  

US crude oil inventories fell by 15,690,000 barrels or ~3.3% in the last ten weeks. The inventories at Cushing fell by ~8,192,000 barrels or 11.8% from the peak in April 2017. Any fall in US and Cushing crude oil inventories could benefit crude oil (UCO) (UWT) prices.

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


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