Crude oil prices
West Texas Intermediate crude oil (ERY) (FXN) (SCO) futures contracts for May delivery fell 0.5% to $50.9 per barrel in electronic trading at 1:35 AM EST on April 6, 2017. Prices fell due to oversupply concerns.
However, prices are near a one-month high. Likewise, broader markets like the S&P 500 (SPY) and Dow Jones are near all-time highs. Bullish momentum in the US stock market could support oil demand and oil prices. The US is the largest oil consumer.
Moves in crude oil prices impact oil and gas producers’ earnings like ExxonMobil (XOM), QEP Resources (QEP), Chevron (CVX), and Goodrich Petroleum (GDP). For more on crude oil prices and drivers, read Part 1 of this series.
EIA’s crude oil inventories
The EIA (U.S. Energy Information Administration) reported that US crude oil inventories rose by 1.6 MMbbls (million barrels) to 535.5 MMbbls from March 24–31, 2017. US crude oil inventories rose 0.3% week-over-week and 7.4% year-over-year.
A market survey estimated that US crude oil inventories would have fallen by 0.4 MMbbls from March 24–31, 2017. A surprise rise in US crude oil inventories limited the upside for crude oil (PXI) (USL) (IEZ) futures on April 5, 2017. For more on crude oil prices, read Part 1 in this series. In Part 4, we’ll see why US crude oil inventories rose.
Impact of US crude oil inventories
US crude oil inventories are at the highest level ever. They’re also above their five-year range. US crude oil inventories have risen by ~56.6 MMbbls, or 10.3%, in the last 14 weeks. Crude oil prices fell ~1.3% during this period. Record crude oil inventories would pressure crude oil (IEZ) (IYE) prices. US crude oil inventories are the second-biggest bearish catalyst for crude oil prices after US crude oil production.
In the next part of this series, we’ll take a look at US crude oil production.
US crude oil imports fell by 374,000 bpd to 7,850,000 bpd from March 24–31, 2017. Imports fell 4.5% week-over-week, but rose 8.2% year-over-year.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.