Crude Inventories See Small Gain (OIH, USO, OIL)

Last week’s draw-down in crude oil is not being mirrored this week.  We just saw the weekly Department of Energy  inventories and the reading came to a gain of 128,000 barrels of crude oil to 343.76 million barrels.  This is a small gain on the surface but a gain still.  We had penciled in a level of roughly 500,00, but as a draw-down rather than an increase. We have been watching the Oil Services HOLDRs (NYSE: OIH), the United States Oil (NYSE: USO) ETF and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) react to this news.

Gasoline stocks did decline by 1.7 million barrels to an inventory of about 208 million barrels.  We were looking for a draw-down there of only about 1 million barrels.  Distillates rose by 767,000 barrels to 162.38 million barrels.

The real notion to watch after the crude figure is the refining capacity, and that rose slightly.  We saw that refining capacity was running at 84.1%, up from 84.0% a week ago.

At 10:40 AM EST NYMEX WTI Crude is $0.80 at $71.25 per barrel.  The Oil Services HOLDRs (NYSE: OIH) is down 0.3%at $107.76, the United States Oil (NYSE: USO) ETF is down 0.9% at $36.82 and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is down 1% at $23.34.

JON C. OGG
August 26, 2009