U.S. petroleum inventories | 24 December 2021

#SP500:

The U.S. stock market finished the week lower, reversing some of last week’s gains on the back of this week’s Federal Open Market Committee meeting. The Fed took a hawkish stance on both inflation and thus interest rates. Growth sectors (information technology and consumer discretionary) lagged the market on this news given the relatively higher interest rate sensitivity of future profits. The Fed is now expected to end its asset purchases completely by March of next year. Moreover, the Fed believes three interest rate hikes are warranted in 2022. Three months ago, the Fed was evenly split between rate hikes starting in 2022 and 2023.

Trading recommendation: range 4495 - 4710.

#FedEx:

FedEx reported financial results for the quarter ended November 30. Second quarter operating income improved due to higher revenue per shipment at all transportation segments, despite the negative effect of labor market challenges that have contributed to global supply chain disruptions. The quarter’s results also benefited from continued strategic management actions to improve revenue quality and favorable net fuel. Board of Directors has authorized a new $5 billion share repurchase program. The new program is in addition to the share repurchase program announced in 2016 authorizing the repurchase of up to 25 million shares, of which 2.3 million shares remain available for repurchase.

Trading recommendation: Buy 247.94 and take profit 254.02.

#WTI:

U.S. petroleum inventories are well below their normal seasonal level and have continued sliding in recent weeks. Total U.S. inventories of crude and products outside the strategic petroleum reserve are at the lowest seasonal level since 2014, according to weekly data from the U.S. Energy Information Administration. U.S. inventories are 79 million barrels (6%) below the five-year seasonal average for 2016-2020 and 59 million barrels (5%) below the pre-pandemic average for 2015-2019. Gasoline stocks are 10 million barrels (4%) below the pre-pandemic five-year average, also the lowest seasonal level since 2014. This is a positive signal for oil prices.

Trading recommendation: buy 66.76 and take profit 73.16.