Cushing inventories 

According to the EIA, Cushing inventories increased by 1.4 MMbbls (million barrels) to 37.2 MMbbls on April 27–May 4. Cushing inventories were near the highest level since January 19. However, the inventories have declined by ~29.1 MMbbls or 44% year-over-year.

Inventories and crude oil prices are usually inversely related. WTI crude oil futures have risen ~52% from a year ago. The iShares Global Energy ETF (IXC) and the Energy Select Sector SPDR ETF (XLE) have risen ~22% and 18%, respectively, since May 5, 2017. IXC targets to follow an index of global equities in the energy sector. XLE aims to follow the Energy Select Sector Index.

Cushing Inventories Are near January High

Valero (VLO), Andeavor (ANDV), and Marathon Petroleum (MPC) account for 7.5% of XLE’s holdings. These stocks have risen ~82%, 78%, and 57%, respectively, since May 5, 2017. These stocks were the top percentage gainers in XLE’s portfolio from a year ago.

US crude oil inventories 

US crude oil inventories declined by ~2.2 MMbbls (million barrels) to 433.8 MMbbls on April 27–May 4. The inventories also declined by 88.8 MMbbls or ~17% from a year ago. The US oil inventories dropped ~19% from the record high reached on March 31, 2017.

Impact  

Cushing inventories declined ~47% from the record high reached on April 7, 2017. However, Cushing inventories were near the highest level since January 19. Another increase in Cushing inventories could pressure crude oil prices this week.

Next, we’ll discuss US crude oil rigs.

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