Cushing, OK Inventory
Oil inventories plunge…more than 14.5 million barrels for week ended September 2nd. This was the greatest weekly plunge in 17 years attributed to Tropical Storm Hermine. The U.S. Energy Information Administration said expectations were for an increase of 225,000 barrels.
The price of oil jumped $1 to $47.25 a barrel from the news. “I think you need to see more than one week of this to get worries about oversupply out of the market,” said Gene McGillian, senior analyst at Tradition Energy of Stamford, Connecticut.
Tropical Storm Hermine interrupted shipping routes and production last week, even though the storm eventually turned to the northeast and did not harm key facilities in the Gulf.
In conclusion…this report is a minor tremor in oil supply and pricing contrasted to the impact of oil inventory shortfall due to the $1 trillion slash in new oil field investments from 2015 to 2026. This was reported last week in the Oil And Gas Insider article Oil Price Spike Inescapable. Click here to read last weeks report.
Reference: UPDATE 1: Biggest weekly U.S. Crude Inventory Drop, By David Gaffen, Reuters, September 8, 2016; Oil Price Spike Inescapable, By Bill Moist, Oil And Gas Insider, September 5, 2016