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Oil Closing in on $80 as EIA Reports Bullish Inventory Data
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U.S. oil prices finished high on Wednesday after a weekly report from the Energy Information Administration ("EIA") showed a smaller-than-expected increase in supplies, to go with biger declines in fuel stocks. Saudi Arabia’s decision to raise the official selling prices of its crude for Asian buyers further supported the commodity.
On the New York Mercantile Exchange, WTI crude futures gained $1.60 (or 2%), to close at $79.75 a barrel yesterday.
We believe that oil’s current levels allow long-term-oriented market participants to buy shares in quality companies at attractive prices. Investors interested in the sector could benefit from having top-ranked stocks like Valaris Limited (VAL - Free Report) , Murphy USA (MUSA - Free Report) and Sunoco LP (SUN - Free Report) in their portfolio.
Let's dig deep into EIA’s Weekly Petroleum Status Report for the week ending Mar 1.
Analyzing the Latest EIA Report
Crude Oil: The federal government’s EIA report revealed that crude inventories rose 1.4 million barrels compared to analysts’ expectations of a 3.7-million-barrel increase per the analysts surveyed by S&P Global Commodity Insights. The stockpile build with the world’s biggest oil consumer was largely thanks to higher imports and lower export shipments. However, the magnitude was lower than expected due to a pullback in production and strong demand.
Total domestic stock now stands at 448.5 million barrels — 6.3% lower than the year-ago figure of 478.5 million barrels and 1% less than the five-year average.
The latest report also showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) rose 701,000 barrels to 31.7 million barrels.
Meanwhile, the crude supply cover edged down from 30.5 days in the previous week to 30.4 days. In the year-ago period, the supply cover was 31.9 days.
Let’s turn to the products now.
Gasoline: Gasoline supplies decreased for the fifth time in as many weeks. The 4.5-million-barrel draw was primarily attributable to a surge in demand. Analysts had forecast that gasoline inventories would drop 2.3 million barrels. At 239.7 million barrels, the current stock of the most widely used petroleum product is 0.7% more than the year-earlier level, while it is 2% lower than the five-year average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) fell for the seventh successive week. The 4.1-million-barrel drop mainly reflected healthy demand and exports. Meanwhile, the market looked for a supply draw of 800,000 barrels. Following last week’s decrease, current inventories — at 117 million barrels — are 4.3% below the year-ago level, while it is 10% lower than the five-year average.
Refinery Rates: Refinery utilization, at 84.9%, rose 3.4% from the prior week.
3 Energy Stocks to Buy
Having gone through the Weekly Petroleum Status Report, investors interested in the energy sector might consider operators like Valaris Limited, Murphy USA and Sunoco LP. Each of these companies currently carries a Zacks Rank #1 (Strong Buy).
Valaris Limited: The 2024 Zacks Consensus Estimate for VAL indicates 324.1% year-over-year earnings per share growth.
Valaris is valued at around $4.8 billion. VAL has seen its shares fall 12.8% in a year.
Murphy USA: Murphy USA beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other. It has a trailing four-quarter earnings surprise of 13.6%, on average.
Murphy USA is valued at around $8.7 billion. The company has seen its shares surge 61.2% in a year.
Sunoco LP: The 2024 Zacks Consensus Estimate for SUN indicates 34% year-over-year earnings per unit growth.
Sunoco is valued at around $6.2 billion. SUN has seen its units rise 33.7% in a year.
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Oil Closing in on $80 as EIA Reports Bullish Inventory Data
U.S. oil prices finished high on Wednesday after a weekly report from the Energy Information Administration ("EIA") showed a smaller-than-expected increase in supplies, to go with biger declines in fuel stocks. Saudi Arabia’s decision to raise the official selling prices of its crude for Asian buyers further supported the commodity.
On the New York Mercantile Exchange, WTI crude futures gained $1.60 (or 2%), to close at $79.75 a barrel yesterday.
We believe that oil’s current levels allow long-term-oriented market participants to buy shares in quality companies at attractive prices. Investors interested in the sector could benefit from having top-ranked stocks like Valaris Limited (VAL - Free Report) , Murphy USA (MUSA - Free Report) and Sunoco LP (SUN - Free Report) in their portfolio.
Let's dig deep into EIA’s Weekly Petroleum Status Report for the week ending Mar 1.
Analyzing the Latest EIA Report
Crude Oil: The federal government’s EIA report revealed that crude inventories rose 1.4 million barrels compared to analysts’ expectations of a 3.7-million-barrel increase per the analysts surveyed by S&P Global Commodity Insights. The stockpile build with the world’s biggest oil consumer was largely thanks to higher imports and lower export shipments. However, the magnitude was lower than expected due to a pullback in production and strong demand.
Total domestic stock now stands at 448.5 million barrels — 6.3% lower than the year-ago figure of 478.5 million barrels and 1% less than the five-year average.
The latest report also showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) rose 701,000 barrels to 31.7 million barrels.
Meanwhile, the crude supply cover edged down from 30.5 days in the previous week to 30.4 days. In the year-ago period, the supply cover was 31.9 days.
Let’s turn to the products now.
Gasoline: Gasoline supplies decreased for the fifth time in as many weeks. The 4.5-million-barrel draw was primarily attributable to a surge in demand. Analysts had forecast that gasoline inventories would drop 2.3 million barrels. At 239.7 million barrels, the current stock of the most widely used petroleum product is 0.7% more than the year-earlier level, while it is 2% lower than the five-year average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) fell for the seventh successive week. The 4.1-million-barrel drop mainly reflected healthy demand and exports. Meanwhile, the market looked for a supply draw of 800,000 barrels. Following last week’s decrease, current inventories — at 117 million barrels — are 4.3% below the year-ago level, while it is 10% lower than the five-year average.
Refinery Rates: Refinery utilization, at 84.9%, rose 3.4% from the prior week.
3 Energy Stocks to Buy
Having gone through the Weekly Petroleum Status Report, investors interested in the energy sector might consider operators like Valaris Limited, Murphy USA and Sunoco LP. 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.
Valaris Limited: The 2024 Zacks Consensus Estimate for VAL indicates 324.1% year-over-year earnings per share growth.
Valaris is valued at around $4.8 billion. VAL has seen its shares fall 12.8% in a year.
Murphy USA: Murphy USA beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters and missed in the other. It has a trailing four-quarter earnings surprise of 13.6%, on average.
Murphy USA is valued at around $8.7 billion. The company has seen its shares surge 61.2% in a year.
Sunoco LP: The 2024 Zacks Consensus Estimate for SUN indicates 34% year-over-year earnings per unit growth.
Sunoco is valued at around $6.2 billion. SUN has seen its units rise 33.7% in a year.