Oil Roars Higher on Bullish EIA Data, Within Sight of $100
U.S. oil prices advanced 3.6% on Thursday in New York for its biggest one-day gain in nearly five months after a weekly report from the Energy Information Administration ("EIA") indicated shrinking supplies in the storage hub of Cushing, OK.
On the New York Mercantile Exchange, WTI crude futures gained $3.29 to close at $93.68 a barrel yesterday, its highest since Aug 29.
With oil breaking out above $90 per barrel — a healthy enough level for market participants —investors interested in the sector could benefit from having quality stocks like Solaris Oilfield Infrastructure SOI, CVR Energy CVI and Helix Energy Solutions Group HLX.
Let's dig deep into EIA’s Weekly Petroleum Status Report for the week ending Sep 22.
Analyzing the Latest EIA Report
Crude Oil: The federal government’s EIA report revealed that crude inventories fell 2.2 million barrels compared to expectations of a 2.2 million barrels decrease per the analysts surveyed by S&P Global Commodity Insights. The stockpile draw with the world’s biggest oil consumer was largely thanks to the sustained strength in refining and export demand. These factors have more than offset the continued high domestic production, which, at 12.9 million barrels per day, is the highest since March 2020.
Total domestic stock now stands at 416.3 million barrels — 3.3% less than the year-ago figure and 4% less than the five-year average.
The latest report also showed that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) dropped 943,000 barrels to 22 million barrels — the lowest since July 2022.
Meanwhile, the crude supply cover increased from 25.2 days in the previous week to 25.3 days. In the year-ago period, the supply cover was 26.9 days.
Let’s turn to the products now.
Gasoline: Gasoline supplies increased for the second time in three weeks. The one million-barrel rise was primarily attributable to a combination of a dip in exports and higher imports. Analysts had forecast that gasoline inventories would decline 800,000 barrels. At 220.5 million barrels, the current stock of the most widely used petroleum product is 3.9% more than the year-earlier level, while it is 2% below the five-year average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) rose after falling in the previous week. The 398,000-barrel increase mainly reflected a pullback in consumption. Meanwhile, the market looked for a supply drop of 1.1 million barrels. Following last week’s build, current inventories — at 120.1 million barrels — are 5% above the year-ago level, though they are 13% lower than the five-year average.
Refinery Rates: Refinery utilization, at 89.5%, fell 2.4% from the prior week.
3 Energy Stocks to Buy
Having gone through the Weekly Petroleum Status Report, investors interested in the energy space might consider the operators mentioned below. These companies currently sport a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Solaris Oilfield Infrastructure: It beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters at an average of 18.8%.
SOI is valued at around $460 million. Solaris Oilfield Infrastructure has seen its shares move up 14% in a year.
CVR Energy: It beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters. Over the past 60 days, CVR Energy saw the Zacks Consensus Estimate for 2023 move up 38.8%.
CVR Energy is valued at around $3.4 billion. CVI has seen its shares gain 15.7% in a year.
Helix Energy Solutions Group: Over the past 60 days, Helix Energy Solutions Group saw the Zacks Consensus Estimate for 2023 move up 4.3%. The 2023 Zacks Consensus Estimate for HLX indicates 200% year-over-year earnings per share growth.
Helix Energy Solutions Group is valued at around $1.7 billion. HLX has seen its shares surge 191.5% in a year.
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