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The Zacks Analyst Blog Highlights: Exxon Mobil, Chevron, ConocoPhillips, Valero Energy and HollyFrontier

Zacks Equity Research

For Immediate Release

Chicago, IL – September 26, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Exxon Mobil Corp. (XOM-Free Report), Chevron Corp. (CVX-Free Report), ConocoPhillips (COP-Free Report), Valero Energy Corp. (VLO-Free Report) and HollyFrontier Corp. (HFC-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Thursday’s Analyst Blog:

EIA Inventory Data: Crude Supplies Drop to 8-Month Low

The U.S. Energy Department's weekly inventory release showed that crude stockpiles logged a surprise decline, now at their lowest level in eight months. The report further revealed that within the ‘refined products’ category, gasoline stocks fell, while distillate supplies were up from the week-ago level. Meanwhile, refiners continue to operate at utilization rates that are highest for this time of year since 2006. Meanwhile, refiners scaled up utilization rates.

The supportive crude data from the U.S. government nudged West Texas Intermediate (WTI) crude futures closer to $93 per barrel yesterday.

Analysis of the Data

Crude Oil: The federal government’s EIA report revealed that crude inventories fell by 4.27 million barrels for the week ending Sep 19, 2014, following an increase of 3.67 million barrels in the previous week.

The analysts surveyed by Platts – the energy information arm of McGraw-Hill Financial Inc. – had expected crude stocks to go up some 1 million barrel. A sharp pullback in imports and strength in refinery utilization rates led to the large stockpile drawdown with the world's biggest oil consumer even as domestic production continued to spike, now at their highest level since 1986.

However, crude inventories at the Cushing terminal in Oklahoma – the key delivery hub for U.S. crude futures traded on the New York Mercantile Exchange – were up 191,000 barrels from the previous week’s level to 20.19 million barrels. Nevertheless, stocks are currently 61% under the all-time high of 51.86 million barrels reached in Jan 2013.

Following the fifth inventory decrease in 6 weeks, at 358.0 million barrels, current crude supplies are essentially in-line with the year-ago period and is within the upper limit of the average for this time of the year. The crude supply cover was down from 22.1 days in the previous week to 21.9 days. In the year-ago period, the supply cover was 22.6 days.

Gasoline: Supplies of gasoline were down for the second week in a row, as domestic consumption strengthened and production fell. This was partially offset by sharply higher imports.

The 414,000 barrels withdrawal – compared to analysts’ projections for a 600,000 barrels decrease in supply level – took gasoline stockpiles down to 210.32 million barrels. Following this drawdown, the existing inventory level of the most widely used petroleum product is 2.7% lower than the year-earlier level and is at the middle of the average range.

Distillate: Distillate fuel supplies (including diesel and heating oil) were up 823,000 barrels last week, significantly higher than analysts’ expectations for a 160,000 barrels rise in inventory level. The increase in distillate fuel stocks – the fifth in as many weeks – could be attributed to tepid demand and strong imports, somewhat negated by lower production.

At 128.60 million barrels, distillate supplies are 1.8% below the year-ago level but is close to the lower limit of the average range for this time of the year.

Refinery Rates: Refinery utilization was up 0.4% from the prior week to 93.4%. The analysts were expecting the refinery run rate to decrease.

About the Weekly Petroleum Status Report

The Energy Information Administration (EIA) Petroleum Status Report, containing data of the previous week ending Friday, outlines information regarding the weekly change in petroleum inventories held and produced by the U.S., both locally and abroad.

The report provides an overview of the level of reserves and their movements, thereby helping investors understand the demand/supply dynamics of petroleum products. It is an indicator of current oil prices and volatility that affect the businesses of the companies engaged in the oil and refining industry.

The data from EIA generally acts as a catalyst for crude prices and affect producers, such as Exxon Mobil Corp. (XOM-Free Report), Chevron Corp. (CVX-Free Report) and ConocoPhillips (COP-Free Report), and refiners such as Valero Energy Corp. (VLO-Free Report) and HollyFrontier Corp. (HFC-Free Report). With an improvement/deterioration in the companies’ ability to generate positive earnings surprises, they can then move higher/lower from their current Zacks Rank.

As of now, all the above-mentioned companies retain a Zacks Rank #3 (Hold), implying that they are expected to perform in line with the broader U.S. equity market over the next one to three months.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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