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U.S. Oil Prices Rise As EIA Confirms Large Inventory Draw
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The U.S. Energy Department's inventory release showed that crude stockpiles recorded a large weekly draw on the back of strong refinery runs. As a result, the front month West Texas Intermediate (WTI) crude futures moved up 3.1% (or $2.02) to end at $67.86 per barrel yesterday – the highest settlement since Aug 7.
Energy Stocks on a Roll
The federal data sparked widespread buying in energy stocks, which pushed the Energy Select Sector SPDR – an assortment of the largest U.S. energy companies – up 1.2% Wednesday.
The two energy representatives in the 30-stock Dow Jones industrial average, ExxonMobil (XOM - Free Report) and Chevron (CVX - Free Report) gained 1.4% and 0.8%, respectively, yesterday. Meanwhile, some of the biggest movers of the S&P 500 were oil and oil-related stocks like Marathon Oil Corporation (MRO - Free Report) , Hess Corporation (HES - Free Report) , Diamond Offshore Drilling, Inc. (DO - Free Report) and Newfield Exploration Company .
Analysis of the EIA Data
Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 5.8 million barrels for the week ending Aug 17, following a shock increase of 6.8 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 3.4 million barrels.
Oil inventories have generally trended lower in a year and a half. In fact, stockpiles have shrunk in 48 of the last 72 weeks and are down nearly 55 million barrels in the past year. The gradual fall has helped the U.S. crude market shift from year-over-year storage surplus to a deficit. At 408.4 million barrels, current crude supplies are 12% below the year-ago figure though stocks are at the five-year average.
Strong refiner demand and lower imports led to the larger-than-expected stockpile draw with the world's biggest oil consumer even as domestic production rose back to 11 million barrels per day – the most since the EIA started maintaining weekly data in 1983.
In particular, output in the United States have climbed sharply on increased production from shale formations to remain over the 10 million barrels a day threshold since early February.
Meanwhile, stocks at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – rose 772,000 barrels to 24.2 million barrels.
The crude supply cover was down from 23.6 days in the previous week to 23 days. In the year-ago period, the supply cover was 26.5 days.
Gasoline: Gasoline supplies were up for the second time in three weeks on slightly weaker demand. The 1.2 million barrels gain – defying the polled number of 400,000 barrels fall in supply level – took gasoline stockpiles up to 234.3 million barrels. Following last week’s addition, the stock of the most widely used petroleum product is now 1.9% above the year-earlier level and is 6% over the five-year range.
Distillate: Distillate fuel supplies (including diesel and heating oil) were up 1.8 million barrels last week. Meanwhile, analysts expected the supply level to increase by 2 million barrels. The fourth weekly rise in a row could be attributed to an uptick in production. Nevertheless, at 130.8 million barrels, current supplies are 12% below the year-ago level and 7% lower than the five-year average.
Refinery Rates: Refinery utilization was unchanged from the prior week at 98.1% - the highest in 20 years.
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.
Helix Energy Solutions provides deepwater oilfield services in the Gulf of Mexico. In the last 30 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings has risen 27% in the same period.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
U.S. Oil Prices Rise As EIA Confirms Large Inventory Draw
The U.S. Energy Department's inventory release showed that crude stockpiles recorded a large weekly draw on the back of strong refinery runs. As a result, the front month West Texas Intermediate (WTI) crude futures moved up 3.1% (or $2.02) to end at $67.86 per barrel yesterday – the highest settlement since Aug 7.
Energy Stocks on a Roll
The federal data sparked widespread buying in energy stocks, which pushed the Energy Select Sector SPDR – an assortment of the largest U.S. energy companies – up 1.2% Wednesday.
The two energy representatives in the 30-stock Dow Jones industrial average, ExxonMobil (XOM - Free Report) and Chevron (CVX - Free Report) gained 1.4% and 0.8%, respectively, yesterday. Meanwhile, some of the biggest movers of the S&P 500 were oil and oil-related stocks like Marathon Oil Corporation (MRO - Free Report) , Hess Corporation (HES - Free Report) , Diamond Offshore Drilling, Inc. (DO - Free Report) and Newfield Exploration Company .
Analysis of the EIA Data
Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 5.8 million barrels for the week ending Aug 17, following a shock increase of 6.8 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 3.4 million barrels.
Oil inventories have generally trended lower in a year and a half. In fact, stockpiles have shrunk in 48 of the last 72 weeks and are down nearly 55 million barrels in the past year. The gradual fall has helped the U.S. crude market shift from year-over-year storage surplus to a deficit. At 408.4 million barrels, current crude supplies are 12% below the year-ago figure though stocks are at the five-year average.
Strong refiner demand and lower imports led to the larger-than-expected stockpile draw with the world's biggest oil consumer even as domestic production rose back to 11 million barrels per day – the most since the EIA started maintaining weekly data in 1983.
In particular, output in the United States have climbed sharply on increased production from shale formations to remain over the 10 million barrels a day threshold since early February.
Meanwhile, stocks at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – rose 772,000 barrels to 24.2 million barrels.
The crude supply cover was down from 23.6 days in the previous week to 23 days. In the year-ago period, the supply cover was 26.5 days.
Gasoline: Gasoline supplies were up for the second time in three weeks on slightly weaker demand. The 1.2 million barrels gain – defying the polled number of 400,000 barrels fall in supply level – took gasoline stockpiles up to 234.3 million barrels. Following last week’s addition, the stock of the most widely used petroleum product is now 1.9% above the year-earlier level and is 6% over the five-year range.
Distillate: Distillate fuel supplies (including diesel and heating oil) were up 1.8 million barrels last week. Meanwhile, analysts expected the supply level to increase by 2 million barrels. The fourth weekly rise in a row could be attributed to an uptick in production. Nevertheless, at 130.8 million barrels, current supplies are 12% below the year-ago level and 7% lower than the five-year average.
Refinery Rates: Refinery utilization was unchanged from the prior week at 98.1% - the highest in 20 years.
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.
Want to Own an Energy Stock Now?
If you are looking for a near-term energy play, Helix Energy Solutions Group, Inc. (HLX - Free Report) may be an excellent 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.
Helix Energy Solutions provides deepwater oilfield services in the Gulf of Mexico. In the last 30 days, three earnings estimates moved north, while none moved south for the current year. The Zacks Consensus Estimate for earnings has risen 27% in the same period.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>