U.S. oil prices advanced on Wednesday to a near two-month high after a weekly report from the Energy Information Administration ("EIA") showed drawdowns in crude and fuel stockpiles.

On the New York Mercantile Exchange, WTI crude futures gained 1.3% to close at $83.88 a barrel yesterday — the highest since Apr 16.

With oil remaining above $80 per barrel — a healthy enough level for market participants —investors interested in the sector could benefit from having quality stocks like Sunoco LP (SUN Quick QuoteSUN - Free Report) , SM Energy Company (SM Quick QuoteSM - Free Report) and Tullow Oil (TUWOY Quick QuoteTUWOY - Free Report) in their portfolios.

Let's dig deep into EIA’s Weekly Petroleum Status Report for the week ending Jun 28.

Analyzing the Latest EIA Report

Crude Oil: The federal government’s EIA report revealed that crude inventories fell 12.2 million barrels, compared to analysts’ expectations of a 1.1-million-barrel decrease. The significantly larger-than-expected stockpile decline in the world’s biggest oil consumer was largely thanks to a jump in exports, lower imports and strong refinery demand.

Total domestic stock now stands at 448.5 million barrels, 0.8% lower than the year-ago figure of 452.2 million barrels and 4% less than the five-year average.

However, on a slightly bearish 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) rose 345,000 barrels to 34.2 million barrels.

Meanwhile, the crude supply cover dropped from 27.3 days in the previous week to 26.7 days. In the year-ago period, the supply cover was 27.7 days.

Let’s turn to the products now.

Gasoline: Gasoline supplies decreased for the second time in three weeks. The 2.2-million-barrel drop was primarily attributable to a jump in demand that reached a new 2024 high. Analysts had forecast that gasoline inventories would fall 1.1 million barrels. At 231.7 million barrels, the current stock of the most widely used petroleum product is 5.6% more than the year-earlier level, while it is 1% lower than the five-year average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) fell for the third week in a row. The 1.5-million-barrel drop again reflected an uptick in demand. Meanwhile, the market looked for a supply draw of 600,000 barrels. Despite last week’s decrease, current inventories — at 119.7 million barrels — are 5.6% above the year-ago level but 10% lower than the five-year average.

Refinery Rates: Refinery utilization, at 93.5%, rose 1.3% from the prior week.

3 Energy Stocks to Buy

Having reviewed the Weekly Petroleum Status Report, investors interested in the energy sector might consider operators like Sunoco LP, SM Energy Company and Tullow Oil. Sunoco currently sports a Zacks Rank #1 (Strong Buy), while SM Energy and Tullow carry a Zacks Rank #2 (Buy) each.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunoco LP: The Zacks Consensus Estimate for 2024 earnings of Sunoco indicates 99.7% growth.

SUN is valued at around $5.7 billion. Sunoco has seen its stock rise 28.4% in a year.

SM Energy Company: SM beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. SM Energy has a trailing four-quarter earnings surprise of 13.8%, on average.
SM is valued at around $5.1 billion. SM Energy has seen its shares increase 41.5% in a year.

Tullow Oil: TUWOY is valued at some $583 million. Over the past 60 days, the Zacks Consensus Estimate for 2024 earnings has increased 20%.

Tullow Oil enjoys a Value, Growth and Momentum Score of A, B and B, respectively, each helping it round out with a VGM Score of A. TUWOY shares have gained 6.3% in a year.