Changes in inventory levels
On February 21, the EIA (U.S. Energy Information Administration) is scheduled to announce last week’s US crude oil inventory data. A fall of more than ~0.5 MMbbls (million barrels) could narrow the inventories spread. A Reuters poll suggests a rise of 3.1 MMbbls in oil inventories. If the EIA data are in line with the poll, then the inventories spread will remain unchanged for the second consecutive week.
Oil inventories and their five-year average
In the week ending February 8, US crude oil inventories were 6% higher than their five-year average—the same as the previous week. Oil prices and the inventories spread usually move inversely. If the inventory spread contracts, it could boost oil prices in the coming weeks. The inventories spread is the difference between oil inventories and their five-year average.
Oil prices and energy stocks
Since the EIA released its inventory data on February 13, US crude oil April futures have risen 3.9%. On February 13–19, oil-weighted stocks Carrizo Oil & Gas (CRZO), California Resources (CRC), and Denbury Resources (DNR) have risen 5.5%, 11.2%, and 13%, respectively, and outperformed their peers. Apart from the constant inventories spread, optimism around the US-China trade talks supported oil prices.