Cushing stocks reach record high as capacity continues to quickly fill
Bearish oil fundamentals keep rolling in. On Tuesday night the API reported a surge in crude oil inventories by 10.5 million barrels. Cushing, Okla., stocks increased by 3 million barrels and in line with the Genscape report from Monday showing Cushing stocks at a new all-time record high as capacity continues to quickly fill. In spite of all of the talk coming from Saudi Arabia/OPEC and the decline in U.S. rigs deployed to the oil sector there are still no signs that production is being curtailed in the short to medium term any place in the world. Simply said supply continues to outpace demand resulting in inventories growing strongly.
Since the API data was released the market has been trading lower heading into the Asian trading session. Tomorrow the weekly EIA inventory report is going to take on a new level of importance as the market awaits to see if the EIA data is in sync with the bearish API report. If so, prices should remain pressured for the short term.
Until oil production starts to get left in the ground somewhere in the world (actually in multiple places) the price of oil will continue to push to lower levels as the market looks for the threshold(s) that results in production becoming uneconomical and left behind. So far the market has not found that level just yet.
Global equities have been in recovery mode for the last three or four sessions. The EMI Global Equity Index increased by 0.84% over the last twenty four hours. All ten bourses in the Index are now back in positive territory for 2015 with the European bourses still in the lead. Global equities have been a positive price directional drive for the oil complex so far this week.