Cushing crude oil inventories
Market surveys estimate that Cushing crude oil inventories fell
between May 5 and May 12, 2017. A fall in crude oil inventories at
Cushing could support US crude oil (USO) (UCO) (RYE) prices. Higher crude oil prices could have a positive impact on the earnings of crude oil producers like Apache (APA), Warren Resources (WRES), and QEP Resources (QEP).
EIA’s crude oil inventory report
On May 17, 2017, at 10:30 AM EST, the EIA (U.S. Energy Information
Administration) will release its crude oil inventory report for the week
ending May 12, 2017.
For the week ending May 5, 2017, the EIA reported that Cushing crude
oil inventories fell by 0.4 MMbbls (million barrels) to 66.2 MMbbls in
the previous week. Inventories are down 0.6% week-over-week and 2.2%
year-over-year. Cushing crude oil inventories fell for the fourth
consecutive week.
Cushing’s storage capacity
Cushing, Oklahoma, is the delivery point for crude oil futures
contracts trading on NYMEX. It’s also the largest crude oil storage hub
in the US. Cushing’s crude oil storage capacity is 73 MMbbls.
Impact
As you can see in the above graph, crude oil (FENY) (DIG) (ERY)
prices and inventories have an inverse relationship. Cushing crude oil
inventories hit the highest level of 69.4 MMbbls in the week ending
April 7, 2017. Inventories are down 5% from their peak. The fall in
Cushing crude oil inventories could support crude oil prices.
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