Energy
Oil Tries to Interpret Inventory Data (OIH, USO, OIL)
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The Department of Energy gave some critical data in its weekly oil inventories. Frankly, you can make a bullish case here and a bearish case as well. The drop in crude oil came to -978,000 barrels over last week. Dow Jones had a figure of a build at +1.7 million barrels, but we had been told to expect far less of a build than that. That would be very bullish on the surface, until you parse the other data. We are 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) on the news.
Gasoline stocks posted a huge build of more than 2.9 million barrels. Dow Jones listed an expectation of only 600,000 barrels and we were looking for a smaller build than that. Distillates came in at +679,000 barrels, and Dow Jones listed an expectation of about +200,000 barrels.
The capacity of refineries in the U.S. ran at 85%, up from 84.6% last week and above an expectation of 84.3% from Dow Jones. This 85% compares to 84.5% to 85% that we were looking for from our own figures.
Oil Services HOLDRs (NYSE: OIH) is up 1.5% at $118.75, the United States Oil (NYSE: USO) ETF is down 0.1% at $36.50 and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is down 0.15% at $24.01 on the news. NYMEX WTI Crude is currently trading up $0.06 or $0.07 at $70.95. Again, this sounded very bullish on the crude headline, but it looks like it was entirely made up for in higher gasoline inventories.
JON C. OGG
October 7, 2009
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