Oil Stocks Aren't Gaining Even With Oil Rising

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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