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.
On February 19, Brent crude oil April futures settled ~$10 higher than WTI crude oil April futures—near its four-month high.
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.
Kimberly-Clark (KMB) stock has risen 20.5% this year, boosted by the company’s better-than-expected sales and earnings during its last reported quarter. However, its stock could stop climbing. Here's why.