This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Oil Prices Roar on Bullish Reports

Stocks in this article: TPLM KOG NOG SSN DPTR XOM BP

NEW YORK ( TheStreet) -- Oil prices were roaring Thursday morning on bullish inventory and analyst reports and upbeat economic news.

West Texas Intermediate (WTI) light sweet crude oil for August delivery was spiking by $2.22 to $98.87 a barrel, while the September Brent crude contract was gaining $2.84 to $116.07, despite a weaker euro and stronger dollar.

The American Petroleum Institute (API) on Wednesday reported a big weekly decline in crude stockpiles, with inventories falling 3.2 million barrels in the week ended Jul.1. Gasoline supplies fell 2 million barrels and distillate stocks declines 1.6 million barrels. Refiners reduced utilization 0.2 percentage points to 86.30% capacity.

"Whereas the decline in crude stocks can be explained by lower imports, the decline in oil products suggests a rise in demand," says Carsten Fritsch, Commerzbank commodity research analyst.

If the Department of Energy's corresponding weekly inventory report confirms the API report, set to be released at 11 am ET, the market should respond enthusiastically. "They too are expected to show a decline in crude inventories, but will probably give a much smaller decline in gasoline stocks, while an increase in distillate stocks is expected," says Fritsch.

The API data preceded a spate of upbeat economic news and bullish oil reports from Morgan Stanley and Goldman Sachs.

Morgan Stanley analysts reiterate their bullish view on oil, particularly in the second half of 2011. "We expect inventory draws will prompt OPEC (Organization of the Petroleum Exporting Countries) to increase production, at the expense of spare capacity," the analysts said in a client note. Goldman Sachs encourages buying of the Brent December 2012 contract on strong demand outlook.

The JBC Energy Research Centre says that oil demand from utilities has been robust worldwide, with oil demand from Japanese utilities, for instance, predicted to reach 360,000 barrels a day in the third quarter, an uptick of 25% year-over-year, with the peak seen in August. But towards the end of the third quarter, JBC Energy expects fuel oil margins to come under pressure from ebbing utility demand and "the expected release of Middle Eastern crude finally piling supply-side pressure onto fuel oil markets."

Automatic Data Processing said companies added 157,000 payrolls in June, surpassing expectations for job gains of 60,000, according to Concurrently, the number of Americans filing for unemployment benefits fell last week. The Bureau of Labor reported that 418,000 Americans filed for unemployment in the week ending July 2, down from the revised 432,000 from the week prior.

June retail same-store sales expectations were mediocre heading into Thursday's results, but so far companies are topping forecasts.

SEB commodity research strategist Filip Petersson says crude oil appears unlikely to retreat Thursday.

"We are now well back above the levels prior to the IEA's announcement to release emergency stockpiles, without significant fundamental reasoning for this move. This has set chins wagging about speculative participation in the crude market. Whether this is attributable or not, prices definitely have a bullish tilt to them," said Summit Energy analyst Matt Smith.

Energy stocks were advancing. Triangle Petroleum Corporation (TPLM) was gaining 3.3% to $6.91, Kodiak Oil & Gas (KOG) was surging by 5% to $6.69, Northern Oil & Gas (NOG) was adding 4.1% to $23.90, Samson Oil & Gas (SSN) was popping by 3.5% to $2.98, Delta Petroleum (DPTR) was spiking by 1.5% to 47 cents, Exxon (XOM) was rising 0.7% to $82.15 and BP (BP) was ahead by 1.1% to $44.41.

-- Written by Andrea Tse in New York.

>To contact the writer of this article, click here: Andrea Tse.

Copyright 2011 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs