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WTI prices see a glimmer of hope at Cushing (Part 6 of 11) (Continued from Part 5) Cushing inventories
Cushing, Oklahoma, is the delivery point for NYMEX crude futures contracts. It’s where a lot of crude supply sources meet a lot of the crude demand sources. So, monitoring inventory levels at Cushing is a very important part of understanding what’s going to happen to WTI (West Texas Intermediate) prices.
Crude stocks at Cushing have continuously been rising since October 2014, when stocks were close to ~19 million barrels.
Until last week, inventories have increased on average by 2.23 MMbbls since the beginning of this year. Breaking the trend in the week ended February 27, inventories increased by just 540,000 barrels to 49.2 million barrels.
These levels are just ~2.6 MMbbls short of the record high inventory levels of ~52 MMbbls in January 2013.
To put things further into perspective, consider that according to the EIA, Cushing has about 71 million barrels of crude storage. The current storage is about 69% of the total storage capacity, as per the EIA. Coupled with the fact that inventories have been continuously rising for the past four months, this finding makes it more likely that Cushing will soon approach its full capacity. Although the build seems to have slowed down, it’s probable that Cushing will soon reach its full capacity—as long as US production surge.
If the oil hub reaches its full storage, oil prices could tumble further.
Increasing inventories pull prices lower, which in turn hurt the margins of companies such as Chevron (CVX), Whiting Petroleum (WLL), Concho Resources (CXO), and ExxonMobil (XOM). All these companies are components of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and they make up ~5% of the ETF.
Continue to Part 7 Browse this series on Market Realist:
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Whiting Petroleum Corporation
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CODE : WLL |
ISIN : US9663871021 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Whiting Petroleum is a oil producing company based in United states of america. Whiting Petroleum is listed in Germany and in United States of America. Its market capitalisation is US$ 6.2 billions as of today (€ 6.1 billions). Its stock quote reached its highest recent level on August 22, 2008 at US$ 99.26, and its lowest recent point on April 03, 2020 at US$ 0.25. Whiting Petroleum has 90 927 193 shares outstanding. |