Stay With The Energy Sector

Today’s EIA Energy data (see bullet points just below) should have sent the sector skidding lower, but it didn’t.

(Cut-and-pasted from

The EIA reports that for the week ending Nov 11:

  • Crude oil inventories had a build of +5.274 mln barrels (consensus called for a build of +1.48 mln barrels)
  • Gasoline inventories had a build of +0.746 mln barrels (consensus called for a draw of -0.42 mln barrels)
  • Distillate inventories had a build of +0.310 mln barrels

Q4 ’16 should be the first quarter since mid-2015 that Energy contributes positively to SP 500 earnings.

Here is the trend in Q4 ’16 Energy sector earnings estimates the last 6 – 7 weeks:

  • 11/11/16: +8.2%
  • 11/4/16: +2.9%
  • 10/28/16: +1.4%
  • 10/21/16 -1.0%
  • 10/14/16: -0.1%
  • 10/7/16: +2%
  • 10/1/16: +2.5%

Source: Thomson Reuters “This Week in Earnings”

The jump in the last week surprised me. The strength in the oil complex yesterday (Exxon, CVX, OIH, etc.) was also surprising.

The sector laps very easy comp’s in Q4 ’16, Q1 ’17 and Q2 ’17.

But Ive been writing that for a while.

What we hear from the new Administration will matter.

There is a lot of angst over the sector now, with the choppiness of crude trading, what the new Administration does with solar credits, etc.

Give it more time.

Thanks for reading.





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