17 Jul

The OECD’s Oil Inventories: Are the Oil Bulls Back?

WRITTEN BY Gordon Kristopher

The OECD’s crude oil inventories

The EIA estimates that the OECD’s (Organisation for Economic Cooperation and Development) oil inventories decreased by 0.9 MMbbls (million barrels) to 2,834.3 MMbbls in June compared to the previous month. Inventories also declined by 178.0 MMbbls (5.6%) year-over-year. Inventories almost hit a three-year low of 2,801.0 MMbbls in March.

The OECD’s oil inventories dropped by ~228.3 MMbbls (~7.5%) from January 2017 to June due to supply cuts, unexpected production outages, and strong demand.

The OECD’s Oil Inventories: Are the Oil Bulls Back?

Brent oil prices have risen ~30.0% since January 1, 2017. The Vanguard Energy ETF (VDE) increased ~3.9% during the same period. VDE tracks the performance of an index of energy stocks.

HollyFrontier (HFC), Delek US Holdings (DK), Valero (VLO), and PBF Energy (PBF) account for ~4.0% of VDE’s holdings. These stocks have risen ~122.0%, ~103.0%, 65.0%, and ~62.0%, respectively, since January 1, 2017. These stocks were the top percentage gainers in VDE’s portfolio during this period.

OECD’s crude oil inventories peaked

The OECD’s oil inventories hit a record high of ~3,115.0 MMbbls in July 2016. Brent oil prices averaged ~$45.00 per barrel during the same period. The OECD’s oil inventories have declined ~9.0% since July 2016.

However, Brent oil prices have increased ~43.0% since July 1, 2016. Inventories and oil prices are inversely related, which is illustrated in the chart above.


The OECD’s oil inventories averaged 3,051.4 MMbbls in 2016 and 2,991.0 MMbbls in 2017. The EIA estimates that these inventories could average 2,839.0 MMbbls in 2018 and 2,936.0 MMbbls in 2019. The expectation of a rise in non-OPEC production in 2018 and 2019 could lead to an increase in the OECD’s crude oil inventories.

The OECD’s oil inventories were 0.2% below the five-year average in June, which is bullish for oil prices. If these inventories rise above the five-year average, it could be bearish for crude oil prices.

Please read Escalating Trade War: S&P 500 and Crude Oil Fell for the latest updates on crude oil.

Latest articles

Today, Canopy Growth announced that it acquired the Saskatchewan-based KeyLeaf Life Sciences along with entities relating to the company and its intellectual property. Here's what you need to know about the completed deal.

Yesterday, Tyson Foods (TSN) and fellow meat producers Pilgrim’s Pride (PPC) and Sanderson Farms (SAFM) took a hit to their stocks after news came out about an investigation over price-fixing allegations.

On June 24, RH (RH) was trading at $115.01, implying a rise of 21.2% since its announcement of its first-quarter earnings results on June 12. Despite the surge in its stock price, the company is still trading at a discount of 29.1% to its 52-week high.

26 Jun

Roku Stock Fell Close to 7.0% Yesterday

WRITTEN BY Aditya Raghunath

Roku stock fell 6.8% yesterday to close trading at $93.25 per share. Roku stock has lost over 9.0% in market value in the last two trading days. Prior to this pullback, Roku stock was up a whopping 235.0% year-to-date.

26 Jun

Beyond Meat Stock Up Today on New Product Launch

WRITTEN BY Rajiv Nanjapla

Today, Beyond Meat (BYND) announced that its new product, Beyond Beef, will hit markets across the US later this week.

FedEx (FDX) ended fiscal 2019 on a dismal note and reported a significant YoY decline in fourth-quarter earnings. The delivery giant posted adjusted EPS of $5.01, which was 15.2% lower than the year-ago quarter’s earnings of $5.91. The company cited sluggish revenue growth and increased expenses as the main reason behind the dismal bottom-line performance.