Crude oil is slumping slightly today after the Energy Department announced that U.S. stockpiles are at the highest level since 1990. The price of a barrel of oil for May delivery is about $49 dollars right now.
The inventory data followed an earlier report from OPEC who cut its anticipated global oil demand for the year by 1.37 million barrels a day, 1.6% fewer than last year. That’s in line with what the IEA said last week, when it said daily demand would fall 1 million barrels a day this year compared to last.
Oil prices have lifted from their early year lows, but haven’t spiked upward. There’s still uncertainty about when global production will return to pre-recession levels.
Even though oil’s more expensive, oil companies remain in a precarious position and their profitability for the year is not a sure thing. As a result, you can see in this chart (via Paul Kedrosky) that oil companies’ stocks are negative/flat even while the price of oil lifts. Normally, that would be weird, under present circumstances, it makes sense.
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