Cushing, Oklahoma, is the largest crude oil storage facility in the United States. Wall Street analysts anticipate that crude oil inventories at Cushing would fall between November 24, 2017, and December 1, 2017. The decline in Cushing inventories could have a positive impact on oil (DTO) (OIL) prices.
EIA’s Cushing inventories
The EIA estimated that Cushing’s crude oil inventories fell by 2,914,000 barrels to 58.3 MMbbls (million barrels) between November 17 and November 24, 2017. Inventories fell 5% week-over-week and 3,188,000 barrels, or 5.1%, year-over-year. It was the largest weekly decline in eight years.
Cushing inventories fell due to the shutting down of the Keystone oil pipeline. The Keystone pipeline restarted on Tuesday, November 28, 2017. Cushing inventories were near a 13-week low. The decline in the inventories is bullish for oil (DWT) (UCO) prices. Higher oil prices benefit energy companies’ (FXN) (FENY) earnings like Stone Energy and Bill Barrett.
EIA’s US crude oil inventories
US crude oil inventories fell 3.4 MMbbls (million barrels), or 0.75%, to 453.7 MMbbls between November 17 and November 24, 2017. The inventories fell by 34 MMbbls or 7.1% year-over-year.
Impact of US and Cushing crude oil inventories
US crude oil inventories were down 81.1 million barrels, or 15.3%, from their peak. The inventories at Cushing are down ~17% from the peak in April 2017. Any decline in Cushing oil inventories could support oil (DWT) prices.
Next, we’ll analyze how the US oil rigs influence oil prices.