Continued Risk to Oil Sector Investors

oil stocks

Since April I have been posting about the risks to oil sector investors. Among other issues shown below, Rig Count and Price/Inventory spread remains a growing concern. Below are chart links and factors to pay attention to.

> Price & Inventory Spread is a growing concern (see chart below)

> The rig count has risen 121.7% from the same period in 2016. US crude oil rigs have risen for 22 consecutive weeks.

> Oil inventory held by the 35-country membership of the OECD hit a higher surplus then when OPEC first reached its agreement to cut production in late November.

> Russia has stated it can live indefinitely with $40 oil. In addition to growing production from Libya and Nigeria, U.S. shale oil production continues to grow dramatically. The EIA is calling for U.S. production, which is now at record highs, to average about 10.2 million barrels of oil per day by Q4/18.

> Gasoline inventories currently sit at 242 million barrels, or 9 percent, above the five-year average of 223 million barrels

Price / Inventory Spread Chart & Insight:

Also note rising oil rig count: