Solid Oil Inventory Data, Mixed Metrics (OIH, DIG, USO, OIL)

The Department of Energy has just released its new weekly data on oil inventories. The headline data looks good for those wanting lower oil prices, but there is actually some very mixed data in the report.  The key ETFs that we are watching on the news are the Oil Services HOLDRs (NYSE: OIH), the Ultra Oil & Gas ProShares (NYSE: DIG), the United States Oil (NYSE: USO) ETF and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL).   NYMEX WTI Crude is up $0.06 per barrel at $76.08 10:34 AM EST after the news, which is a far lower price than what has been seen into weekly inventory data in recent weeks.

Crude oil inventories rose 2.09 million barrels to 339.899 million barrels; Dow Jones had estimates at only about +800,00 barrels.  We were looking for about 1 million.  Gasoline inventories showed the big gains as they rose 3.996 million barrels to 214.08 million barrels; we saw a Dow Jones estimate of 700,000 and we were looking for or perhaps “hoping for” 1 million or more.  So both crude and gasoline blew out the numbers.

Distillates were soft again with a drop by -1.17 million barrels to 165.698 million barrels.

Some more bad news was on the refining capacity.  This came down back under 80.0% to a reading of 79.66%.  Last week was 80.25% and Dow Jones had an estimate of 80.5%.  We would have been happy if this would have just remained above 80%, but this is a dud of a reading and it just shows how troubled the refining business is.

The Oil Services HOLDRs (NYSE: OIH) is down 0.3% at $119.45, the Ultra Oil & Gas ProShares (NYSE: DIG) is down 0.7% at $35.52, the United States Oil (NYSE: USO) ETF is down 0.85% at $39.28, and the iPath S&P GSCI Crude Oil Total Return Index ETN (NYSE: OIL) is down 0.85% at $25.94.  NYMEX WTO Crude at 10:52 AM EST is currently down $0.94 at $77.43 per barrel.

JON C. OGG