Us Natgas Producers Chase Ai-Driven Surge In Power Demand To Weather Low Prices

U.S. oil prices retreated on Wednesday after a weekly report from the Energy Information Administration ("EIA") showed additions in crude and gasoline stockpiles.

On the New York Mercantile Exchange, WTI crude futures lost 0.75% to close at $68.87 a barrel yesterday. Persistently low crude demand from China, the world's largest oil importer, has also been weighing on prices. Recent stimulus measures have yet to drive any significant near-term recovery in oil consumption. A strengthening U.S. dollar exerted additional downward pressure on the commodity.

With oil unable to reclaim $70 per barrel — a healthy enough level for market participants —investors interested in the sector could benefit from focusing on resilient stocks like EOG Resources EOG, ExxonMobil XOM and Devon Energy DVN.

Let's dig deep into EIA’s Weekly Petroleum Status Report for the week ending Nov. 15.

Analyzing the Latest EIA Report

Crude Oil: The federal government’s EIA report revealed that crude inventories edged up 545,000 barrels compared to analysts’ expectations of a 800,000-barrel decrease. The surprise stockpile gain in the world’s biggest oil consumer was largely thanks to a jump in imports and lower refinery demand.

Total domestic stock now stands at 430.3 million barrels, 4% lower than the year-ago figure of 448.1 million barrels and 4% less than the five-year average.

However, on a bullish note, the latest report shows that supplies at the Cushing terminal (the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange) fell 140,000 barrels to 25.1 million barrels.

Meanwhile, the crude supply cover dropped marginally from 26.5 days in the previous week to 26.4 days. In the year-ago period, the supply cover was 29.2 days.

Let’s turn to the products now.

Gasoline: Gasoline supplies increased for the third time in five weeks. The 2.1-million-barrel climb was primarily attributable to a weakness in demand. Analysts had forecast that gasoline inventories would fall 2.5 million barrels. At 208.9 million barrels, the current stock of the most widely used petroleum product is 3.5% less than the year-earlier level, while it is 4% lower than the five-year average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) fell for the eighth week out of the last nine. The 114,000-barrel drop reflected an uptick in exports, to go with lower production. Meanwhile, the market looked for a supply draw of 1.8 million barrels. The recent decreases notwithstanding, current inventories — at 114.3 million barrels — are 8.2% above the year-ago level but 4% lower than the five-year average.

Refinery Rates: Refinery utilization, at 90.2%, fell 1.2% from the prior week.

3 Energy Stocks to Track

Having reviewed the Weekly Petroleum Status Report, investors interested in the energy sector might consider operators like EOG Resources, ExxonMobil and Devon Energy. Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

EOG Resources is a leading player in the Permian Basin, leveraging its extensive acreage in the prime Northern Delaware region. The company excels in cost control and technological innovation, such as Super Zipper fracs, enhancing operational efficiencies. With a strong focus on maximizing returns through strategic investments and partnerships, EOG continues to drive significant growth and value in the region.

ExxonMobil is one of the largest publicly traded oil and gas companies in the world with operations that span almost every corner of the globe. Spring, TX-based ExxonMobil is fully integrated, meaning it participates in every aspect related to energy — from oil production, to refining and marketing.

Devon Energy is an independent energy company whose oil and gas operations are mainly concentrated in the onshore areas of North America, primarily in the United States. The company’s assets are spread across the key oil assets of Delaware Basin, Eagle Ford, Anadarko Basin and Powder River Basin.

Zacks Investment Research

Energy stocks were higher late Wednesday afternoon, with the NYSE Energy Sector Index up 0.4% and the Energy Select Sector SPDR Fund (XLE) adding 0.8%.

The Philadelphia Oil Service Sector index increased 0.8%, and the Dow Jones US Utilities index was fractionally up.

US crude oil stocks, including those in the Strategic Petroleum Reserve, rose by 1.9 million barrels in the week ended Nov. 15 following an increase of 2.7 million barrels in the previous week. Excluding inventories in the SPR, commercial crude oil stocks increased by 500,000 barrels after a 2.1-million-barrel increase in the previous week, compared with an 85,000-barrel decrease expected in a survey compiled by Bloomberg.

Front-month West Texas Intermediate crude oil was declining 0.8% to $68.87 a barrel while the global benchmark Brent crude contract was down 0.4% at $73.03 a barrel. Henry Hub natural gas futures jumped 6.3% to $3.19 per 1 million BTU.

In corporate news, Hess Chief Executive John Hess said Wednesday that he has not ruled out the possibility of appealing a Federal Trade Commission ban on him taking a board seat at Chevron . Hess and Chevron shares were each adding 0.8%.

Expand Energy shares popped 3.8%. The company said Wednesday it's launching a cash tender offer for its 5.5% senior notes due 2026 and a conditional notice of redemption for its 8.375% senior notes due 2028.

KULR Technology shares jumped past 18% after it said it's developing proprietary carbon fiber-designed custom cathodes in small modular reactors for an unnamed nuclear fusion company.

DT Midstream has agreed to acquire around 1,300 miles of natural gas transmission pipelines connecting seven states from Oklahoma-based midstream operator ONEOK for $1.2 billion in cash. DT Midstream shares were down 0.3%, and ONEOK shed 0.2%.