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Cushing Inventories Increased 28% in the Last 5 Weeks

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Apr. 17 2018, Updated 12:48 p.m. ET

Cushing inventories 

The EIA is scheduled to release its weekly crude oil inventory report on April 18, 2018. Market surveys estimate that Cushing inventories could have increased on April 6–13, 2018. A larger-than-expected increase in Cushing inventories could pressure oil prices.

WTI crude oil futures fell 1.7% to $66.22 per barrel on April 16, 2018. The iShares Global Energy ETF (IXC) and the Energy Select Sector SPDR ETF (XLE) fell ~0.47% and ~1.0%, respectively, on April 16, 2018. XLE aims to track the Energy Select Sector Index. IXC targets to track an index of global equities in the energy sector.

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Cushing inventories for the week ending April 6

The EIA estimates that Cushing inventories increased by 1.13 MMbbls (million barrels) to 36 MMbbls on March 30–April 6, 2018. Cushing inventories increased 28% in the last five weeks. However, Cushing inventories declined by 33.4 MMbbls or 48.1% year-over-year.

US crude oil inventories  

US oil inventories increased by 3.3 MMbbls to 428.6 MMbbls on March 30–April 6, 2018. However, the inventories declined by 104.7 MMbbls or 19.6% from a year ago. The inventories dropped ~20% from the record high hit on March 31, 2017.

Impact 

Cushing inventories dropped ~48.1% from the record high hit on April 7, 2017. Since then, WTI oil prices have increased ~27%. The United States Oil ETF (USO) aims to track the performance of WTI crude oil futures. USO has gained ~22.1% since April 7, 2017.

However, Cushing oil inventories were near a nine-week high. An additional increase in Cushing inventories could weigh on crude oil prices this week.

Next, we’ll discuss US crude oil rigs.

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