Crude Oil: Falling U.S. Production And Elevated Imports - $XOM $CVX $BP $RDS.A $RDS.B $COP $APA $APC $EOG

By Albert Alfonso

. . . On the demand front, refiners processed 16.7 million bpd of crude oil, in line with last week’s figure. Stockpiles of gasoline fell by 0.1 million barrels, while implied consumption hit a new record. Distillates, stockpiles fell by 1.6 million barrels last week. Though this is largely due to decreased supply from refiners as they shift towards gasoline for the summer.


Overall, this was one of the best EIA reports for crude oil. Yes, the market reacted negatively. But this sell-off was more related to sentiment than the fundamentals.

US production is down big, and only elevated imports are keeping inventories from falling significantly. The rate of decline is also accelerating. With rig counts still near their lows, US production is set to decline throughout the year. Eventually, oil prices will need to rise to spur more production as the global glut has eased.

As for how to play an oil price recovery, take your pick from the majors that offer solid dividends: Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), BP Plc (NYSE:BP), Royal Dutch Shell (RDS.A, RDS.B), ConocoPhillips (NYSE:COP). Shale players such as Apache (NYSE:APA), Anadarko (NYSE:APC) and EOG Resources (NYSE:EOG) are also interesting, though are much more oil pure-plays.

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Additional Resources: Energy Co-Investment Strategies For Family Offices

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