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U.S. Oil Storms Past $65 as Inventories Slide for 10th Week
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The U.S. Energy Department's inventory release showed that crude stockpiles recorded another weekly draw to the lowest level since 2015. As a result, the front month West Texas Intermediate (WTI) crude futures moved up 1.8% (or $1.14) to end at $65.61 per barrel yesterday – the highest settlement since December 2014.
But the positive effect from the record tenth straight crude inventory withdrawal was partly offset by builds in gasoline and distillate supplies. On a further bearish note, domestic oil production revisited its rising trend that continues to be the biggest headwind for the market.
Analysis of the EIA Data
Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 1.1 million barrels for the week ending Jan 19, following a decrease of 6.9 million barrels in the previous week. The analysts surveyed by S&P Global Platts – the leading independent commodities and energy data provider – had expected crude stocks to go down some 1.6 million barrels.
An uptick in exports led to the stockpile draw with the world's biggest oil consumer. However, the withdrawal failed to match expectations as U.S. output edged up 128,000 barrels per day last week to 9.9 million barrels per day – tantalizingly close to the all-time record of just over 10 million barrels per day set in 1970.
Oil stockpiles have shrunk in 34 of the last 42 weeks and are down almost 122 million barrels since April. The gradual fall has helped the U.S. crude market shift from year-over-year storage surplus to a deficit. At 411.6 million barrels, current crude supplies are 15.7% below the year-ago period and the lowest since February 2015 though they are in the middle of the average range during this time of the year.
Meanwhile, stocks at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – was down by 3.2 million barrels to three-year lows of 39.2 million barrels.
The crude supply cover was up from 23.9 days in the previous week to 24.1 days. In the year-ago period, the supply cover was 29.5 days.
Gasoline: Supplies of gasoline were up for the eleventh straight week on the strength of imports. The 3.1 million barrels addition – more than the polled number of 2.1 million barrels rise in supply level – took gasoline stockpiles up to 244 million barrels. Despite last week’s increase, the stock of the most widely used petroleum product remains 3.6% below the year-earlier level and is in the middle of the average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) gained 639,000 barrels last week, contrary to analysts’ expectations for 2.5 million barrels decrease in supply level. The weekly rise could be attributed to tepid demand. But at 139.8 million barrels, current supplies are still 17.3% below the year-ago level and are in the lower half of the average range for this time of the year.
Refinery Rates: Refinery utilization was down by 2.1% from the prior week to 90.9%.
About the Weekly Petroleum Status Report
The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.
The data from EIA generally acts as a catalyst for crude prices and affect producers, such as ExxonMobil Corp. (XOM - Free Report) , Chevron Corp. (CVX - Free Report) and ConocoPhillips (COP - Free Report) , and refiners such as Valero Energy Corp. (VLO - Free Report) , Phillips 66 (PSX - Free Report) and Marathon Petroleum Corp. (MPC - Free Report) .
Based in Houston, TX, Occidental is an integrated oil and gas company, with significant exploration and production exposure. The 2017 Zacks Consensus Estimate for this company is 84 cents, representing some 183.2% earnings per share growth over 2016. This year’s average forecast is $2.24, pointing to another 166.3% growth.
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It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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U.S. Oil Storms Past $65 as Inventories Slide for 10th Week
The U.S. Energy Department's inventory release showed that crude stockpiles recorded another weekly draw to the lowest level since 2015. As a result, the front month West Texas Intermediate (WTI) crude futures moved up 1.8% (or $1.14) to end at $65.61 per barrel yesterday – the highest settlement since December 2014.
But the positive effect from the record tenth straight crude inventory withdrawal was partly offset by builds in gasoline and distillate supplies. On a further bearish note, domestic oil production revisited its rising trend that continues to be the biggest headwind for the market.
Analysis of the EIA Data
Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 1.1 million barrels for the week ending Jan 19, following a decrease of 6.9 million barrels in the previous week. The analysts surveyed by S&P Global Platts – the leading independent commodities and energy data provider – had expected crude stocks to go down some 1.6 million barrels.
An uptick in exports led to the stockpile draw with the world's biggest oil consumer. However, the withdrawal failed to match expectations as U.S. output edged up 128,000 barrels per day last week to 9.9 million barrels per day – tantalizingly close to the all-time record of just over 10 million barrels per day set in 1970.
Oil stockpiles have shrunk in 34 of the last 42 weeks and are down almost 122 million barrels since April. The gradual fall has helped the U.S. crude market shift from year-over-year storage surplus to a deficit. At 411.6 million barrels, current crude supplies are 15.7% below the year-ago period and the lowest since February 2015 though they are in the middle of the average range during this time of the year.
Meanwhile, stocks at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – was down by 3.2 million barrels to three-year lows of 39.2 million barrels.
The crude supply cover was up from 23.9 days in the previous week to 24.1 days. In the year-ago period, the supply cover was 29.5 days.
Gasoline: Supplies of gasoline were up for the eleventh straight week on the strength of imports. The 3.1 million barrels addition – more than the polled number of 2.1 million barrels rise in supply level – took gasoline stockpiles up to 244 million barrels. Despite last week’s increase, the stock of the most widely used petroleum product remains 3.6% below the year-earlier level and is in the middle of the average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) gained 639,000 barrels last week, contrary to analysts’ expectations for 2.5 million barrels decrease in supply level. The weekly rise could be attributed to tepid demand. But at 139.8 million barrels, current supplies are still 17.3% below the year-ago level and are in the lower half of the average range for this time of the year.
Refinery Rates: Refinery utilization was down by 2.1% from the prior week to 90.9%.
About the Weekly Petroleum Status Report
The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.
The data from EIA generally acts as a catalyst for crude prices and affect producers, such as ExxonMobil Corp. (XOM - Free Report) , Chevron Corp. (CVX - Free Report) and ConocoPhillips (COP - Free Report) , and refiners such as Valero Energy Corp. (VLO - Free Report) , Phillips 66 (PSX - Free Report) and Marathon Petroleum Corp. (MPC - Free Report) .
Want to Own an Energy Stock Now?
If you are looking for a near-term energy play, Occidental Petroleum Corporation (OXY - Free Report) may be a good selection. This company has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Based in Houston, TX, Occidental is an integrated oil and gas company, with significant exploration and production exposure. The 2017 Zacks Consensus Estimate for this company is 84 cents, representing some 183.2% earnings per share growth over 2016. This year’s average forecast is $2.24, pointing to another 166.3% growth.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>