U.S. oil prices edged up on Wednesday, following global trade worries arising out of vessel attacks in the Red Sea, believed to be by Yemen's Houthi rebels. However, gains were capped by a weekly report from the Energy Information Administration ("EIA") that showed builds in crude and fuel stockpiles.

On the New York Mercantile Exchange, WTI crude futures gained 0.4%, to close at $72.55 a barrel yesterday.

We believe that oil’s current levels of just over $70 allow long-term-oriented market participants to buy shares in quality companies at attractive prices. Investors interested in the sector could benefit from having quality stocks like Oceaneering International (OII Quick QuoteOII - Free Report) , Helix Energy Solutions Group (HLX Quick QuoteHLX - Free Report) and Sunoco LP (SUN Quick QuoteSUN - Free Report) in their portfolios.

Let's dig deep into EIA’s Weekly Petroleum Status Report for the holiday-shortened week ending Jan 5.

Analyzing the Latest EIA Report

Crude Oil: The federal government’s EIA report revealed that crude inventories rose 1.3 million barrels compared to analyst expectations of a 600,000-barrel decrease. The surprise stockpile build with the world’s biggest oil consumer is largely blamed on weaker refiner demand and a dip in exports, to go with continued high domestic production, which, at 13.2 million barrels per day, is near all-time highs.

Total domestic stock now stands at 432.4 million barrels — 1.6% lower than the year-ago figure of 439.6 million barrels and 2% less than the five-year average.

However, on a slightly bullish note, the latest report showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) fell 506,000 barrels to 34.2 million barrels.

Meanwhile, the crude supply cover edged down from 26.2 days in the previous week to 26.1 days. In the year-ago period, the supply cover was 29 days.

Let’s turn to the products now.

Gasoline: Gasoline supplies increased for the seventh time in eight weeks. The 8-million-barrel jump was primarily attributable to a pullback in exports and higher production. Analysts had forecast that gasoline inventories would gain 2.1 million barrels. At 245 million barrels, the current stock of the most widely used petroleum product is 8% more than the year-earlier level, while it is 1% higher than the five-year average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) rose for the seventh time in as many weeks. The 6.5 million-barrel surge mainly reflected a drop in exports and higher imports. Meanwhile, the market looked for a supply build of 1 million barrels. Following last week’s addition, current inventories — at 132.4 million barrels — are 12.5% above the year-ago level but 4% lower than the five-year average.

Refinery Rates: Refinery utilization, at 92.9%, fell 0.6% from the prior week.

3 Energy Stocks to Buy

Having gone through the Weekly Petroleum Status Report, investors interested in the energy space might consider the operators mentioned below. Each of these companies currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oceaneering International: The 2023 Zacks Consensus Estimate for OII indicates 177.4% year-over-year earnings per share growth.

Oceaneering is valued at around $2 billion. OII has seen its shares rise 3.7% in a year.

Helix Energy Solutions Group: The 2023 Zacks Consensus Estimate for HLX indicates 143.8% year-over-year earnings per share growth.

Helix Energy Solutions is valued at around $1.4 billion. HLX has seen its shares rise 20.7% in a year.

Sunoco LP: The 2023 Zacks Consensus Estimate for SUN indicates 10.9% year-over-year earnings per unit growth.

Sunoco is valued at around $5.9 billion. SUN has seen its units rise 30.2% in a year.