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Afternoon Note

Crude Awakening
By Charles Payne, CEO & Principal Analyst
5/10/2017 1:27 PM

Maybe it’s too early to tell, but crude found support around $46.00 this week, and today, it is getting a boost from positive government news on inventories. Still, the XLE is down 10% this year, and many names in the sector have fared worse. I still see an oil rally that eclipse $55.00 on the upside this year.

http://markets.money.cnn.com/cgi-bin/upload.dll/file.png?z6e8f7c0azd25852655de14345afac2d8cbe5128de

So the market, while still meandering, lifted off earlier low points in part to the latest report on petroleum inventories from the US Energy Information Administration. A sharp decline in crude inventory levels, reflecting a sharp decrease in imports, helped crude inventory decrease by 5,200,000 barrels.

Petroleum Inventories

Actual

Estimate

Crude

-5.2 million

-1.8 million

Gasoline

-150,000

-538,000

Distillates

-1.6 million

-1.0 million

 
Of course, the nation is still awash in crude to the tune of 522,500,000 barrels, and domestic production has surged.

Still, I like a number of crude oil ideas including:

  • Chesapeake Energy (CHK)
  • EOG Energy (EOG)

Overall, I feel good about this market, which has had several opportunities for profitable positions to be cashed out; it hasn’t happened, and that’s a buy signal, or at the very least, a hold signal.


 

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