US crude oil
On the same day, the EIA (US Energy Information Administration) reported a decline in oil inventories. US crude oil inventories for the week ended January 12, 2018, declined by 6.9 MMbbls (million barrels) to 412.7 MMbbls. The decline was sufficient to reduce the gap between US crude oil inventories and their five-year average.
However, US crude oil production for the same week rose by 258 thousand barrels per day to 9.8 MMbpd (million barrels per day), just 0.4% below its record high based on the weekly data.
The OPEC monthly oil market report released on January 18, 2018, indicated a rise of 42.4 thousand barrels per day in its oil production in December 2017 on a month-over-month basis, according to secondary source data. However, the group’s oil production was below the agreed ceiling at the 32.5 million barrel per day mark.
Between January 11 and January 18, 2018, US crude oil futures rose just 0.3%. In this period, the S&P 500 Index (SPY) (SPX-INDEX) and the Dow Jones Industrial Average Index (DIA-INDEX) rose 1.1% and 1.7%, respectively. In the next part of this series, we’ll focus on oil’s role in the performance of these equity indexes.
On January 18, 2018, natural gas (UNG) (BOIL) February 2018 futures declined 1.3% and closed at $3.19 per MMBtu (million British thermal units). For the week ended January 12, 2018, EIA (U.S. Energy Information Administration) data showed a fall of 183 Bcf (billion cubic feet) in natural gas inventories, a smaller drop compared to the market expectations of a fall of 201 Bcf.
Natural gas inventories were 12.3% below their five-year average. The gap widened by only 20 basis points into negative territory on a weekly basis. If natural gas inventories had fallen by 201 Bcf, this gap would have widened in the negative territory by 80 basis points. In the trailing week, natural gas futures rose 3.4%.
Between January 11 and January 18, 2018, the Energy Select Sector SPDR ETF (XLE) had the highest correlation of 87.8% with US crude oil futures among energy subsector ETFs.
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.