Oil stocks were mostly down a bit on the day despite the fact that oil traded slightly higher during the session. After this morning's inventory reports I would have expected to see prices trading higher, but traders had other ideas.This morning we saw greater declines in both oil and gasoline inventories, but this was not enough to get the bulls to charge in and lift oil stocks. Crude oil inventories had been expected to climb by about a half million barrels but what we saw was a decline of 1 million barrels. Gasoline supplies had been expected to fall by 1.3 million barrels and they surprised traders by plummeting 2.7 million barrels.
With the much larger drops in inventory than had been expected we would typically expect to see a very strong day for oil prices. Today though, this was not the case and we saw oil prices rise, but only by $0.05 to $63.15.
So what was the main reason why today's inventories surprises were unable to give oil a price lift? Traders seemed to be looking ahead and expecting to see future gasoline inventories on the rise as the nations refineries showed a 2% rise in usage. Analysts had been expecting that refinery usage would increase by less than a half percent.
As the country's refineries exit their seasonal maintenance period and get back to higher capacity they should be able to start to keep up with the rising demand by consumers for gasoline as we inch ever closer to this summers driving season.
In reaction to the refinery increase most of the large oil stocks were trading slightly lower on the day.
- Exxon Mobil Corporation (NYSE: XOM): down 0.3% to $78.20, down $0.20.
- Chevron Corporation (NYSE: CVX): down 0.2% to $77.77, down $0.19.
- Valero Energy Corp. (NYSE: VLO): down 0.5% to $64.96, down $0.35.
- BP p.l.s. ADR (NYSE: BP): down 0.1% to $68.94, down $0.07.
- ConocoPhillips (NYSE: COP): down 0.8% to $69.84, down $0.59.
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Reader Comments (Page 1 of 1)
4-19-2007 @ 6:04AM
kenneth roach said...
ok
4-19-2007 @ 7:43AM
Michael Schneider said...
Analyst comments on the oil inventory numbers and natural gas inventory numbers are available each week in Oil Alerts at http://www.Barrelomoney.com.
This week the analyst on CNBC said the refinery utilization rates look good on the surface but we won't be able to produce the gasoline needed this summer and we won't get help from imports like we did last summer.