- Shares of energy companies fell today as hopes for balance in the crude oil market were dashed by a report that U.S. stockpiles were at an 80-year high.
- Crude oil inventories are 88M barrels above average for this time of year, or ~27%; over the last four weeks, total stockpiles have increased by 30.67M barrels, the most in 32 years for a four-week period.
- One could argue that the energy sector got off easy today with a 1.6% decline while crude oil plunged 9%, but it is helpful to remember that the stocks are not being tossed and turned by anything close to fundamentals.
- "These moves have nothing to do with fundamentals. They have everything to do with positioning," says Rhino Trading's Michael Block. "Everyone is short. A few cover, then everyone does. It’s a vicious whipsawing cycle. And it’s not healthy."
- ETFs: XLE, ERX, VDE, OIH, XOP, ERY, DIG, DUG, IYE, XES, IEO, IEZ, PXE, PXI, FENY, PXJ, RYE, FXN, DDG