OECD’s crude oil inventories
The EIA estimates that OECD’s (Organisation for Economic Cooperation and Development) oil inventories fell by 2.5 MMbbls (million barrels) to 2,953.2 MMbbls in November 2017—compared to the previous month. OECD’s crude oil inventories fell 0.1% month-over-month and by 60.4 MMbbls or 2% from the same period in 2016. The inventories fell by 95.3 MMbbls or 3.1% since January 2017 due to ongoing production cuts and improving global crude oil demand. The fall in OECD’s crude oil inventories is bullish for oil (BNO) (USO) (UCO) prices. Brent crude (BNO) oil prices rose ~15% between January 2017 and November 2017.
OECD crude oil inventories peaked
The above chart shows that OECD’s crude oil inventories are usually inversely related to crude oil. OECD’s oil inventories hit 3,090 MMbbls in July 2016, which was the highest level ever. Brent oil prices averaged ~$45 per barrel in July 2016. Prices recovered from a 13-year low hit in early 2016.
The EIA released its STEO (Short-Term Energy Outlook) report on December 12, 2017. It estimates that OECD’s oil inventories will average 2,985 MMbbls in 2018—2.3% lower than the estimates from the November STEO report because of ongoing production cuts and improving demand. The decline in OECD’s crude oil inventories is bullish for oil (UWT) (DWT) prices. Higher oil prices favor oil producers (FXN) like Rosneft, Shell (RDS.A), and Cobalt International Energy (CIE).
OECD’s oil inventories averaged 2,967 MMbbls in 2015 and 2016. The inventories are expected to average 2,942 MMbbls in 2017.
OECD’s crude oil inventories were near a 25-month low. They have fallen 4.4% since the all-time high in July 2016. Ongoing production cuts could help draw down global oil inventories. The fall in OECD’s oil inventories could support oil (DBO) (SCO) prices.
Next, we’ll discuss US gasoline demand.
Record US crude oil production is limiting the upside for crude oil prices. US oil prices fell ~3% from the high in November 2017.
Hibbett Sports (HIBB) stock surged 22.3% as of 1:54 PM ET today as the company reported impressive results for fiscal 2019's fourth quarter, which ended on February 2.
Wall Street analysts expect a potential upside of 21.63% for Alexion Pharmaceuticals based on the stock's closing price on March 21.
Today, we got another round of dismal data points from Europe (VGK)(EZU). According to a Markit survey, Germany’s (EWG) March PMI Composite Output Index fell to a 69-month low of 51.5.
On March 21, US crude oil’s implied volatility was 24.9%, which was 6.7% below its 15-day average. Usually, lower implied volatility supports oil prices.
The overall cannabis sector took a hit today amid the broader market's declines. The volatility index (VIX) jumped 17.9%, and the cannabis sector is more sensitive than the market.
The tech-heavy NASDAQ Composite Index (QQQ) is on track to post its 12th weekly gain in 13 weeks.