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The Zacks Analyst Blog Highlights: ExxonMobil, ConocoPhillips, Valero Energy, Marathon Petroleum and Talos Energy

Zacks Equity Research

For Immediate Release

Chicago, IL – January 27, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: ExxonMobil XOM, ConocoPhillips COP, Valero Energy VLO, Marathon Petroleum MPC and Talos Energy Inc. TALO.

Here are highlights from Friday’s Analyst Blog:

U.S. Crude Hits Lowest Price in 2 Months: Here’s Why

Oil prices fell $1.15, or 2%, to $55.59 a barrel on Thursday, hitting the lowest levels since Nov 29 on fears that the coronavirus outbreak in China would have a severe impact on oil demand. The health scare, which has killed 26 people so far, was enough to offset the impact of U.S. Energy Department's latest inventory release. The report showed that crude and distillate stockpiles recorded unexpected weekly declines.

Overall, the latest round of energy market selling comes amid heightened worries of the mysterious illness playing out like the 2003 SARS epidemic. Although it is quite difficult at this stage to assess the possible implications, according to Goldman Sachs, the deadly virus could lower oil demand by up to 260,000 barrels per day if it impacts passenger traffic due to travel restrictions.

Meanwhile, let’s also review the EIA's Weekly Petroleum Status Report for the week ending Jan 17.

Crude Oil:The federal government’s EIA report revealed that crude inventories fell by 405,000 barrels, compared to the 500,000 barrels increase that energy analysts had expected. A marginal decline in imports was behind the surprise stockpile draw with the world's biggest oil consumer even as U.S. production remained at record levels. This puts the total domestic stocks at 428.1 million barrels – 3.8% below the year-ago figure and 2% lower than the five-year average.

The latest report also showed that supplies at the Cushing terminal in Oklahoma (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) were down 961,000 barrels to 34.9 million barrels.

The crude supply cover – at 25.2 days – was unchanged from the previous week. In the year-ago period, the supply cover was 25.6 days.

Turning to products, and it is a fairly mixed story.

Gasoline:Gasoline supplies increased for the eleventh straight week. The fuel’s 1.7 million barrels build is attributable to higher imports and production. Analysts had forecast 3.3 million barrels climb. At 260 million barrels, the current stock of the most widely used petroleum product essentially remained where they were a year ago but exceeds the five-year average range by 4%.

Distillate:Distillate fuel supplies (including diesel and heating oil) were down for just the second time in nine weeks. The 1.2 million barrels decrease could be attributed to strengthening demand and lower production. Meanwhile, the market had been looking for a supply climb of 1.6 million barrels. Current supplies – at 146 million barrels – are 2.5% higher than the year-ago level but remain 2% below the five-year average.

Refinery Rates: Refinery utilization was down 1.7% from the prior week to 90.5%.

About the Weekly Petroleum Status Report

The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.

The data from EIA generally acts as a catalyst for crude prices and affect producers, such as ExxonMobil and ConocoPhillips and refiners such as Valero Energy and Marathon Petroleum.

Want to Own an Energy Stock Now?

In case you are looking for a near-term energy play, Talos Energy Inc. might be an excellent selection. An upstream oil and gas company with operations in the Gulf of Mexico and in shallow water offshore Mexico, Talos Energy has a Zacks Rank #1 (Strong Buy).

You can see the complete list of today’s Zacks #1 Rank stocks here.

This Houston, TX-based company has seen the Zacks Consensus Estimate for 2020 rise 7.2% over the past 60 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.


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Valero Energy Corporation (VLO) : Free Stock Analysis Report
 
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
 
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
 
ConocoPhillips (COP) : Free Stock Analysis Report
 
Stone Energy Corporation (TALO) : Free Stock Analysis Report
 
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