Josef Schachter – Energy Market Insights – Wed 15 May, 2019

EIA Oil Data and Corresponding Trading Strategy

The below data is courtesy of Josef Schachter. Through some of my recent conversations with Josef we are waiting for a more significant pullback in the oil price to present some good buying opportunities for oil stocks. While the data is pointing more bearish the recent tensions in the Middle East have kept prices somewhere elevated.

Here’s the data and Josef’s comments…

EIA data this week was quite bearish:

  • Crude oil commercial inventories rose by 5.4Mb continuing the shoulder season build. US Inventories are now 39.7Mb above last year or 9.2%.
  • Total stocks(excluding the SPR)  rose by 14.5Mb on the week and are now 84.7Mb above last year or by 7.1%.
  • US production fell on the week by 100Kb/d to 12.1Mb/d and are now down 200Kb/d from the recent peak.
  • Net imports fell by 106K which impacted imports by 742K on the week.
  • Demand on an overall basis fell by 931Kb/d to 19.5Mb.
  • Gasoline demand fell by 723Kb/d to 9.15Mb/d.

Overall a bearish report but offset by the Middle East terrorist attack on tankers and drone attacks in Saudi Arabia launched by Iranian proxies if the reports are correct. Today WTI is up  38 cents to US$62.16/b. We still expect to see the supply fears abate soon and for WTI to fall  below US$60 this month and in June to the low US$$50’s. Stay on the sidelines with cash for the next great buying opportunity in the coming months. 

Click here to listen to the most recent interview with Josef. Posted on May 4th.