CHICAGO, Dec. 15, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Exxon Mobil Corp. (NYSE:XOM-Free Report), Chevron Corp. (NYSE:CVX-Free Report), Devon Energy Corp. (NYSE:DVN-Free Report), Valero Energy Corp. (NYSE:VLO-Free Report) and Phillips 66 (NYSE:PSX-Free Report).
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Friday's Analyst Blog:
Crude Prices Slump on Surprise Supply Bill
The U.S. Energy Department's weekly inventory release showed that crude stockpiles recorded a surprise build on higher imports and production. The report further revealed that refined product inventories – gasoline and distillate – both increased from their previous week levels.
Following the bearish data from the U.S. government, West Texas Intermediate (WTI) crude futures tumbled below $60 per barrel, the lowest since Jul 2009.
Analysis of the Data
Crude Oil: The federal government's EIA report revealed that crude inventories climbed 1.45 million barrels for the week ending Dec 5, 2014, following a decrease of 3.69 million barrels in the previous week.
The analysts surveyed by Platts – the energy information arm of McGraw-Hill Financial Inc. – had expected crude stocks to go down some 3 million barrels. A sharp uptick in the level of imports and continued spike in domestic production – now at their all-time highest level – led to the unexpected stockpile build-up with the world's biggest oil consumer even as refinery utilization rates improved.
Importantly, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – were up 1.02 million barrels from the previous week's level to 24.91 million barrels. Nevertheless, stocks are currently 52% under the all-time high of 51.86 million barrels reached in Jan 2013.
Following the third inventory increase in 4 weeks, at 380.79 million barrels, current crude supplies are now up 1.5% from the year-ago period and is above the upper limit of the average for this time of the year. The crude supply cover was down from 23.7 days in the previous week to 23.5 days. In the year-ago period, the supply cover was 23.7 days.
Gasoline: Supplies of gasoline were up for the fifth successive week on lower production. The 8.19 million barrels jump took gasoline stockpiles up to 216.76 million barrels. Despite this massive build, the existing inventory level of the most widely used petroleum product is still 1% lower than the year-earlier level and is in the middle of the average range.
Distillate: Distillate fuel supplies (including diesel and heating oil) were up 5.58 million barrels last week. The increase in distillate fuel stocks – the second time in as many weeks – could be attributed to a pile up in the low and ultra-low sulfur diesel category. At 121.75 million barrels, distillate supplies are 3.1% above the year-ago level and are close to the lower limit of the average range for this time of the year.
Refinery Rates: Refinery utilization was up 2% from the prior week to 95.4%.
About the Weekly Petroleum Status Report
The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.
The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.
The data from EIA generally acts as a catalyst for crude prices and affect producers, such as Exxon Mobil Corp. (NYSE:XOM-Free Report), Chevron Corp. (NYSE:CVX-Free Report) and Devon Energy Corp. (NYSE:DVN-Free Report), and refiners, such as Valero Energy Corp. (NYSE:VLO-Free Report) and Phillips 66 (NYSE:PSX-Free Report). With an improvement/deterioration in the companies' ability to generate positive earnings surprises, they can then move higher/lower from their current Zacks Rank.
As of now, all the above-mentioned companies retain a Zacks Rank #3 (Hold), implying that they are expected to perform in line with the broader U.S. equity market over the next one to three months.
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
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