DOE: Crude Inventory & Refining Hold High (OIH, USO, VLO)

The Department of Energy released its weekly Crude Oil and energy inventories this morning.  Some real surprises were seen considering the time of year we are in and the mess in the Gulf of Mexico.  We are watching the key ETFs of Oil Services HOLDRs (NYSE: OIH) and the United States Oil (NYSE: USO) and  Valero Energy Corp. (NYSE: VLO).

U.S. Crude Oil Stocks came in up by a sharp +2.017 Million barrels to end with a total inventory of 365.122 million barrels.  What is interesting is that Dow Jones had expected a drop of roughly -1 million barrels.  We had been expecting only -500,000 barrels after talking with traders.

Gasoline stocks for the week fell by 762,000 barrels to end at 217.58 million barrels in inventory.  Dow Jones had expected a gain of 300,000 barrels, but our conversation with traders was indicating more of a flat week.

The continued strength is in US refineries running at 89.4% capacity.  Dow Jones had estimates at 88.1% and the week ago reading was 87.9%.  We would have been happy with anything above last week’s refinery level.

Distillate stocks rose 297,000 barrels to 156.9 million barrels.  Dow Jones was looking for a +1.2 million and we had no axe to grind there.

Oil Services HOLDRs (NYSE: OIH) popped on the news, but shares are still down 0.5% at $99.91.  The United States Oil (NYSE: USO) is having a hard time getting off the floor and is down 2.5% at $34.13 this morning.

Valero Energy Corp. (NYSE: VLO) is up 0.6% at $17.91 after recovering based on teh refining data.

JON C. OGG