Cushing Inventories Could Pressure Crude Oil Futures

Cushing inventories

Market surveys estimate that Cushing inventories could have increased on April 20–27. A larger-than-expected increase in Cushing inventories could pressure crude oil prices.

WTI crude oil futures fell 0.1% to $68.1 per barrel on April 27. The iShares Global Energy ETF (IXC) and the Energy Select Sector SPDR ETF (XLE) fell ~0.6% and ~1.1%, respectively, on the same day. IXC targets to follow an index of global equities in the energy sector. XLE aims to follow the Energy Select Sector Index. ExxonMobil (XOM) and Hess (HES) account for 23.3% of XLE’s holdings. These stocks fell ~3.8% and ~3.1%, respectively, on April 27. These stocks were the top percentage losers in XLE’s holdings on April 27.

Cushing Inventories Could Pressure Crude Oil Futures

Cushing inventories 

The EIA estimates Cushing inventories increased by 0.5 MMbbls (million barrels) to 35.3 MMbbls on April 13–20. Cushing inventories also rose for the sixth time in seven weeks. However, the inventories declined by 32 MMbbls or 47.5% YoY (year-over-year).

US crude oil inventories 

US oil inventories increased by 2.1 MMbbls to 429.7 MMbbls on April 13–20. However, the inventories declined by 98.9 MMbbls or ~18.7% YoY. The inventories also dropped ~20% from the record high hit on March 31, 2017.

Impact 

Cushing inventories declined ~49.1% from the record high hit on April 7, 2017. Since then, WTI crude oil prices have increased ~30.4%. The United States Oil ETF (USO) aims to track the performance of WTI crude oil futures. USO has increased ~25.3% since April 7, 2017.

However, Cushing oil inventories were near an 11-week high. Another rise in Cushing inventories could weigh on crude oil prices this week.

Next, we’ll discuss US crude oil rigs.