If you think you’ve heard this before, you’re absolutely right. Nonetheless, oil rallied today on a forecast from the International Energy Agency that oil stockpiles in developed countries could hit or fall below their five-year average “very soon.” West Texas Intermediate, the U.S. crude benchmark, closed up 2.2% to $49.30 a barrel. That brings us back near to the $50 level that has defined the top of the range in oil prices for much of 2017. (The high for West Texas Intermediate in 2017 is $54.45 a barrel back on February 23.)
The IEA report also forecast the fastest growth in demand for crude oil in two years. Consumption will grow by 1.6 million barrels a day in 2017. That’s up from growth of 1.5 million barrels a day in the group’s last forecast. (Not much of an increase and certainly within the margin of error on this forecast.) The difference, according to the forecast, is stronger than expected demand in the United States and Europe. This follows on a forecast by OPEC yesterday that called for higher demand for OPEC oil in 2018 as the global market tightens.
Meanwhile, back on the U.S. oil shale front, the U.S. Energy Information Administration reported that U.S. crude oil inventories rose by 5.9 million barrels las week. Analysts were looking for a gain of 3.2 million barrels.
This is the second report on U.S. inventories since Hurricane Harvey shut down most of the oil refineries along the Gulf Coast of Texas
Which means that I’d take any figures on U.S. crude with a grain of salt or three.
Haven’t seen a dip in Macao traffic so far–or at least not an unreasonable one–but you’re right, something to watch.
Hi Jim! Thanks for all the great advice on stocks. I’ve particularly liked your calls on TCEHY (Tencent) and BABA (Alibaba). These are now my top two holdings since you recommended them. It seems like many Chinese internet stocks (like SINA, BZUN, ATHM, TAl and now even JD) are on a rip upwards and having a stellar year. Any other good Chinese tech plays out there?
Also, regarding your bullishness on Macao, you may want to be careful. Macao has been suffering from a severe typhoon season (aka hurricanes) having been hit by 2 in the past few weeks and the one currently hitting it right now. The most severe one had over 20 deaths and severe flooding of many areas (this was made worse by the many construction sites which affected drainage). Over 2/3rds of the hotels lost power and water services for several days. This has caused many people (including myself) to delay trips to Macao. This may cause a dip in this quarters earnings. Just FYI.
Cheers from Hong Kong!