Cushing Inventories Rebound to January High

Cushing inventories  

The EIA estimates that Cushing inventories increased by 0.1 MMbbls (million barrels) to 37.2 MMbbls on May 4–11. Cushing inventories were near the highest level since January 19. However, the inventories at the storage hub have declined by ~29 MMbbls or 43.9% YoY (year-over-year).

Inventories and crude oil prices are usually inversely related. WTI crude oil futures have risen ~49% since May 11, 2017. The iShares Global Energy ETF (IXC) and the Energy Select Sector SPDR ETF (XLE) have risen ~19% and 19%, respectively, since May 11, 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 Rebound to January High

Valero (VLO), Andeavor (ANDV), and Marathon Petroleum (MPC) account for 7.5% of XLE’s holdings. These stocks have risen ~90.1%, 81.2%, and 57.3%, respectively, since May 11, 2017. These stocks were the top percentage gainers in XLE’s portfolio YoY.

US crude oil inventories 

US crude oil inventories declined by ~1.4 MMbbls to 432.3 MMbbls on May 4–11. The inventories also declined by 88.4 MMbbls or ~17% YoY. US oil inventories dropped ~19% from the record high reached on March 31, 2017.

Impact 

Cushing inventories declined ~46% from the record high reached on April 7, 2017. However, Cushing crude oil inventories were near the highest level since January 19. Another increase in Cushing inventories could weigh on crude oil prices this week.

Next, we’ll discuss US crude oil rigs.