Crude Oil Higher on API Data, OPEC Cuts

oil-rigsGasoline inventories fell by 3.15 million barrels, according to the report;

Kuwait’s Oil Minister said on Tuesday #OPEC is committed to restore the balance of the oil market

 

The American Petroleum Institute #API reported a draw of 1.5 million barrels in crude oil inventories for last week, compared to analyst expectations of  a draw of 2.3 million barrels for the week ending May 19. This week’s crude oil inventory draw was accompanied by across the board draws for gasoline, distillates, and oil at the Cushing, Oklahoma facility as well.

Gasoline inventories fell by 3.15 million barrels, according to the report.

For the Week, distillate inventories fell by 1.85 million barrels—offsetting the 1.8 million barrel build last week.

The U.S. Energy Information Administration report on oil inventories is due Wednesday at 10:30 a.m. EDT.

WTI prices have risen this week, from $48.76 last week to $51.41 per barrel on Tuesday. Brent was trading at $54.11, compared to $51.78 last week.

#WTI = West Texas Intermediate

Prices are supported by production cuts from OPEC but prices have been kept in check by domestic productions.

Kuwait Calls for Deeper Cuts

Kuwait’s Oil Minister said on Tuesday #OPEC is committed to restore the balance of the oil market and is not ruling out any option for discussion at the upcoming meeting on Thursday, including considering deeper cuts.

“All options are on the table and could be discussed. However, any agreement should be satisfactory for all parties. And if necessity arises, we could increase the output cut. But it is premature to talk about that now,” the minister said.

He added that Kuwait fully supports the extension of the deal for nine months, as well as all efforts aimed at rebalancing the global oil market. He added that four other non-OPEC countries—Egypt, Norway, Turkmenistan, and Indonesia—could join the output cuts.

Although signs from OPEC producers point to support for a rollover of the cuts, not all members have voiced support for a nine-month extension. $USO closed at $10.64

#OPEC = Organization of Petroleum Exporting Countries

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Rig Count Rise Weighs on Crude Oil

oil_rig#BakerHughes $BHI reports that the U.S. rig count is up 8 rigs from last week to 885, with oil rigs up 9 to 712, gas rigs down 1 to 172, and miscellaneous rigs unchanged at 1.

The U.S. Rig Count is up 479 rigs from last year’s count of 406, with oil rigs up 394, gas rigs up 85, and miscellaneous rigs unchanged.

The U.S. Offshore Rig Count is up 2 rigs from last week to 21 and down 1 rig year over year.

The Canadian Rig Count is down 2 rigs from last week to 80, with oil rigs up 2 to 29 and gas rigs down 4 to 51. The Canadian Rig Count is up 37 rigs from last year’s count of 43, with oil rigs up 13, gas rigs up 25, and miscellaneous rigs down 1 to 0.

On the news, Crude oil prices (WTI) dropped to $47.35 per barrel before rebounding to its current price of $47.35 per barrel.

#WTI – West Texas Intermediate

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Boeing 737 Woes drag DJIA Lower

737maxDJIA component #Boeing $BA is lower, dragging the index lower due to issues with its long awaited 737 Max airplane. The company announced the suspension of #737 Max flights due to a manufacturing issue with low-pressure turbine discs.

Engine supplier CFM International, a joint venture between #General Electric $GE and #Safran $SAFRY , notified Boeing of the manufacturing issue, Boeing said in a statement.

The 737 Max remains in testing and is yet to commence commercial flights.

Shares of plane suppliers #Spirit AeroSystems $SPR , #Textron $TXT , #United Technologies $UTX and #Rockwell Collins $COL followed Boeing lower on the news. Boeing in afternoon trading is down $2.59 to $182.90. DJIA is down 54 units while GE is down 1% to $28.67.

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Pilots Strike Leads to Passenger Brawl!

saveShares of #Spirit Airlines $SAVE are lower by 3% in Tuesday trading after its pilots’ strike forced the carrier to cancel several of its flights.  To make matters worse for the discount airline, a brawl erupted among Spirit Airlines passengers in Florida late Monday after another round of flight cancellations from the carrier, reports Reuters, citing a video of the event.

The cancellations are “just the latest of hundreds” from Spirit, which is engaged in a labor dispute with its pilots, Reuters says. “We are shocked and saddened to see the videos of what took place,” a spokesperson told the news service, adding that its pilots are engaged in “unlawful” strikes.

Footage of the fights spread widely on social media, creating the latest in a string of public relations headaches for U.S. airlines.

At least 11 Spirit flights were canceled at Fort Lauderdale airport on Monday and 31 delayed, according to data.

Hundreds of Spirit flights have been canceled in recent days. On Tuesday, the airline filed for a temporary restraining order against its pilot union.

Broward County Sheriff’s deputies responded to the incident at the airport as about 500 passengers became irate, police said. Video showed people falling down fighting as security officials tried to restrain them.

Three people were arrested for threatening to harm airline employees and challenging them to fight, police said, adding the trio had made the crowd become “increasingly aggressive.”

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