Oil Supplies & Weak Refining Offer No Oil Gains (OIH, USO, VLO)

The Department of Energy released its weekly Crude Oil and energy inventories this morning.  Despite some supply issues being obvious, there has been no help as investors are looking to lower-risk assets today.  We are watching the key ETFs of Oil Services HOLDRs (NYSE: OIH) and the United States Oil (NYSE: USO) as the two key ETFs and are watching Valero Energy Corp. (NYSE: VLO) for the refining angle.

The biggest drop in inventories this week came from Crude Oil stocks with a drop of -2.988 million barrels down to 354.99 million barrels.  Dow Jones had estimates of -2 million barrels and we had been expecting roughly the same.

Gasoline stocks in the U.S. were up by +409,000 barrels to 222.383 million barrels.  Dow Jones had estimates unchanged from the week before.  We were actually expecting a drop here.

US refineries ran At 88.1% versus 91.2% a week ago. Dow Jones had estimates of 90.6%

Usually distillates do not make a difference, but distillates stocks showed a jump of 3.456 million barrels up to 173.142 million barrels.  Dow Jones had estimates of +1.6 million and we do not usually track these.

Crude is weak with other risk assets after the large stock market drop this morning.  At last look, NYMEX WTI Crude was down $1.72 at $78.53 per barrel.  Despite some supply issues there figures showed today, oil is not showing any gains to speak of.

The Oil Services HOLDRs (NYSE: OIH) is down 3.7% at $102.96 and the United States Oil (NYSE: USO) ETF is down 1.9% at $35.19 as it tries to track crude prices.  Valero Energy Corp. (NYSE: VLO) is our go-to name for refinery stocks as it is a pure-play in refining.  Its shares are faring no better and have listed lower with the market and since that lower capacity figure.  Valero is down 4.65% at $17.15 versus a 52-week range of $15.76 to $21.78.

JON C. OGG