Recently, the federal government’s Energy Information Administration (EIA) issued an overall bullish report, showing a smaller-than-expected build in crude stockpiles. Further, the data showed that gasoline inventories were down as predicted, while distillate stocks also declined, though fell short of expectations. In its release, the agency said that crude inventories rose by 1.3 million barrels for the week ending October 16, much lower than analysts' expectations. This is the second successive week in which the crude buildup has been lower than originally anticipated. A major contributing factor to the modest increase can be attributed to a fall in crude oil imports, which dropped to the lowest level in two months. Current crude oil stocks, at 339.1 million barrels, are 8.9% above the year-earlier level and remain above the upper limit of the average for this time of the year (depicted in the first EIA chart below). The ...

Yesterday, the U.S. Energy Department's weekly inventory release showed a less-than-expected build in crude stockpiles. However, the headline news was centered on a sharp drop in gasoline stocks and refinery utilization that pushed oil prices to a fresh 2009 peak and lifted energy stocks. The federal government’s Energy Information Administration (EIA) reported a 400,000 barrels rise in crude inventories for the week ending October 9, much less than analyst expectations. The modest increase can be attributed to scaled back operations by the refiners (prompted by weak profit margins) even as imports fell. This follows last week’s report, which showed an unexpected rise in oil supply figures, against consensus forecast of a buildup. Current crude oil stocks, at 337.8 million barrels, are 9.6% above the year-earlier level and remain above the upper limit of the average for this time of the year (depicted in the first EIA chart ...

Yesterday, we got a bullish report from the federal government’s Energy Information Administration (EIA), showing a surprise decline in crude stockpiles. However, the data also showed a buildup in gasoline and distillate inventories, thereby somewhat neutralizing the positive impact. In its weekly release, the agency reported a much bigger-than-expected 5.9 million barrels drop in crude inventories for the week ending September 4, as imports fell and refiners raised demand. This follows last week’s release, which also reported crude drawdown but were below expectations. Current crude oil stocks, at 337.5 million barrels, are 13.3% above the year-earlier level and remain above the upper limit of the average for this time of the year (depicted in the first EIA chart below). The supply cover decreased from 23.6 days in the previous week to 22.9 days of supply, but it remains above the year-earlier level of 20.3 days.  ...

Yesterday, the federal government’s Energy Information Administration (EIA) reported mixed inventory data. The crude drawdown was below expectations and distillate stocks were up more than anticipated. On the positive side, gasoline supplies dropped steeply and total U.S. oil demand over the last four-week period turned positive after a long time. In its weekly release, the agency reported a lower-than-expected 372,000 barrels drop in crude oil stockpiles for the week ending August 28, as a jump in imports offset a rise in petroleum demand. This follows last week’s report, which showed an unexpected rise in oil supply figures, missing estimates of a drop. Current crude oil stocks, at 343.4 million barrels, are 13.0% above the year-earlier level and remain above the upper limit of the average for this time of the year (depicted in the first EIA chart below). The supply cover decreased marginally from 23.8 days in ...

Yesterday, we got a bearish report from the Energy Information Administration (EIA), with crude oil stockpiles showing an unexpected rise. In its weekly release, the agency said that crude inventories rose 128,000 barrels from the preceding week, far off estimates that hoped for another drawdown, following last week’s encouraging data. Major contributing factors to the inventory buildup were a rise in domestic production and crude oil imports. Current crude oil stocks, at 343.8 million barrels, are 12.4% above the year-earlier level and remain above the upper limit of the average for this time of the year (depicted in the first EIA chart below). The supply cover increased marginally from 23.7 days in the previous week to 23.8 days of supply and remains significantly above the year-earlier level of 20.5 days. Gasoline stocks were down 1.7 million week over week, better than expectations ...

Yesterday, Petroleos Mexicanos (also known as Pemex), Mexico’s state oil company, said that it has awarded a contract to Houston-based oilfield service provider – Halliburton Company (HAL) – to drill 170 wells at the large Chicontepec oil basin.  Pemex said that the deal, worth approximately $159 million, will last three years and involve four drilling rigs. Halliburton is expected to commence work on the Chicontopec fields (in northern Mexico) from the next month. This will mark the oilfield services giant’s debut in an area where its competitors Schlumberger Limited (SLB) and Weatherford International (WFT) already have an established presence.  At a time when Halliburton, the world's second-largest oilfield-services company by revenue, is reeling from its heavy exposure to the natural gas-centric North American market, the Pemex contract allows the company to expand its international presence. Mexico is an important market for all oil service ...

• CIT Group (NYSE:CIT) and a number of key bondholders agreed to a $3 billion rescue agreement that will allow the company to restructure without filing for chapter 11 bankruptcy protection

• Hasbro (NYSE:HAS) reported Q2 earnings of 26 cents a share, ex-items, beating Street estimates of 23 cents a share.  Revenues rose 1% year-over-year to $792.2 million, versus consensus estimates of $797.1 million

• Halliburton (NYSE:HAL) reported Q2 earnings of 30 cents a share, ex-items, beating consensus estimates of 27 cents a share.  Revenues in the quarter sank 22.1% year-over-year to $3.5 billion, but came in ahead of consensus estimates of $3.4 billion

• Las Vegas Sands (NYSE:LVS) is reportedly planning to apply for an IPO in Hong Kong in August

•  Weatherford International (NYSE:WFT) missed Q2 EPS estimates of 16 cents, reporting earnings of 10 cents a share on revenues of $2.0 billion

• Johnson Controls (NYSE:JCI) reported fiscal Q3 earnings of

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National Oilwell Varco Upside on Strong Backlog Houston-based drilling equipment manufacturer National-Oilwell Varco’s (NOV) stock price has been going south since June 1, 2009. The oilfield machinery powerhouse has seen its common stock fall 26% since last month. Although we expect that the pace of new capital equipment orders for the company will remain sluggish due to reduced exploration and development activity in the oil and gas industry, we believe that National-Oilwell Varco’s existing order backlog will support revenues for its Rig Technology segment, which accounts for more than half of its total sales. The current backlog of $9.6 billion amply cushions against the downturn, driving a fairly steady $1.3 billion in revenue per quarter. Looking ahead, we believe that the likelihood of economic recovery in 2010 is strong, which will improve demand for National-Oilwell's products and services. Consequently, we think that the company offers ...

Weatherford Weathers Downturn on International Strength

Weatherford International (WFT), which recently moved its corporation to Switzerland from Bermuda, is a leading manufacturer and provider of equipment and services used in drilling, completion and production of oil and natural gas wells. The company carries out its operations along four geographical segments: North America, Latin America, Europe/West Africa/CIS and Middle East/North Africa/Asia.

Weatherford's large North American presence has become a liability in the current environment of tentative natural gas prices. But the company has a growing international footprint, particularly in the Eastern Hemisphere. International markets accounted for a little over 50% of total revenue earned last year, a ratio that is expected to materially increase this year due to the current slowdown in North American activity levels.

The slowdown in international activity levels is expected to be much less pronounced (an approximately 10% drop is expected from the 2008 levels), which works to

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The Conference Board's Leading Indicators Index (LEI) broke above 100 and charted its first 6-month increase since April 2007. But is this a sign for rejoicing? Not quite. Though scores above 100 are considered to signal expanding conditions, the LEI is just at 100.2. This is indicative more of stabilization than growth. Furthermore, consumer expectations and building permits contributed to the increase, both of which are a bit suspect. Improvements in both the Conference Board's and the University of Michigan's consumer confidence surveys have been driven by greater optimism over future conditions. These increases were likely aided by the improving stock market. Should the markets stall as friends and neighbors lose jobs, sentiment is likely to falter. Plus, the confidence surveys don't always align with actual spending. Building permits, as my colleague Dirk van Dijk pointed out earlier this week, are problematic. Inventory is the ...