Changes in inventory levels
On February 27, the EIA (U.S. Energy Information Administration) is scheduled to announce last week’s US crude oil inventory data. A rise of less than ~0.5 MMbbls (million barrels) could narrow the inventories spread. A fall would be welcomed by oil bulls. A Reuters poll suggests a rise of 3.589 MMbbls in oil inventories. If the EIA data are in line with the poll, then the inventories spread will remain unchanged for the third consecutive week.
Oil inventories and their five-year average
In the week ending February 15, 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 21, US crude oil April futures have fallen 2.6%. On February 21–25, oil-weighted stocks Denbury Resources (DNR), Whiting Petroleum (WLL), and WPX Energy (WPX) have fallen 2.3%, 2.5%, and 3.7%, respectively, and underperformed their peers. Although the inventories spread remains constant, President Trump’s tweet dragged oil prices down.