DOE Inventory Drawdown Only Highlights More $90 Oil (OIH, USO)

Crude Oil Stocks fell yet again by a sharp -5.333 million barrels and ended at 340.685 million barrels.  Dow Jones was expecting only a drop  by -2.3 million barrels.  This brings the total down close to 20 million in recent weeks.

Gasoline Stocks rose by 2.4 million barrels to 217.173 million barrels against a Dow Jones estimate of +900,000 barrels.  Distillate stocks -589,000 barrels to 160.716 million barrels, in-line with a Dow Jones target of -600,000.

Refineries came mostly in-line with targets at 87.7% run rates, which compares to 87.8% expected from Dow Jones and versus 88.0% the week before.

NYMEX crude is still up this morning and trading up $0.67 at $90.49. Keep your eye on this $90 level.  If it gets much higher, the calls for $100 oil will begin to pick up steam faster than experts predicted.

The Oil Services HOLDRs (NYSE: OIH) have climbed mildly on the news to up 0.3% at $138.77 but investors may start watching that 52-week trading range of $89.48 – 139.99.  The United States Oil (NYSE: USO) is still up but has already come off highs.  The USO is trading up 0.76% at $38.58 after the news.

JON C. OGG