Sweet 16 Update - April 17
Posted: Fri Apr 16, 2021 6:05 pm
Despite a big increase in the price of oil on Wednesday after a bullish EIA petroleum report, the Sweet 16 finished the week up just 0.51%. The portfolio is up 56.80% YTD, which compares to the S&P 500 Index gain of 11.43% YTD.
Oil futures ended lower on Friday, with WTI falling 0.5% to settle slightly above $63 per barrel, but still recording a fourth straight week of gains amid a slew of upbeat economic data out of the US and China. Retail sales in the US grew the most since May 2020, while new applications for US unemployment benefits fell to the lowest since the pandemic began in March 2020. In China, official data showed the Chinese economy growing a record 18.3% year-on-year in the first quarter. Sentiment remained supported by reports that the IEA and the OPEC raised their 2021 oil demand forecasts by 230,000 bpd and 100,000 bpd, respectively. Meantime, a larger-than-expected draw in crude oil inventories last week was reported by both the EIA and API. However, concerns over slow vaccination campaigns lingered amid rising coronavirus cases in some countries.
Wall Street is waiting for Q1 results which won't start trickling out until the last week of April. Q1 results should be good because WTI average $58/bbl in Q1 compared to $39/bbl in Q4. NGL prices were also up big, which offsets a small decline in natural gas prices. All of my forecasts are based on WTI averaging $60/bbl in Q2 and $65/bbl in 2H 2021. I listened to a forecast this afternoon that said oil could move to over $90/bbl if Covid-19 vaccines continue rolling out at their current pace. Despite travel restrictions in Europe, India and Brazil, demand for oil based products is clearly on the rise. Demand for oil is seasonal and the peak demand period begins in May.
Last week I raised my valuation of CLR to $44 and FANG to $115.
I expect more companies to release operational updates next week.
Oil futures ended lower on Friday, with WTI falling 0.5% to settle slightly above $63 per barrel, but still recording a fourth straight week of gains amid a slew of upbeat economic data out of the US and China. Retail sales in the US grew the most since May 2020, while new applications for US unemployment benefits fell to the lowest since the pandemic began in March 2020. In China, official data showed the Chinese economy growing a record 18.3% year-on-year in the first quarter. Sentiment remained supported by reports that the IEA and the OPEC raised their 2021 oil demand forecasts by 230,000 bpd and 100,000 bpd, respectively. Meantime, a larger-than-expected draw in crude oil inventories last week was reported by both the EIA and API. However, concerns over slow vaccination campaigns lingered amid rising coronavirus cases in some countries.
Wall Street is waiting for Q1 results which won't start trickling out until the last week of April. Q1 results should be good because WTI average $58/bbl in Q1 compared to $39/bbl in Q4. NGL prices were also up big, which offsets a small decline in natural gas prices. All of my forecasts are based on WTI averaging $60/bbl in Q2 and $65/bbl in 2H 2021. I listened to a forecast this afternoon that said oil could move to over $90/bbl if Covid-19 vaccines continue rolling out at their current pace. Despite travel restrictions in Europe, India and Brazil, demand for oil based products is clearly on the rise. Demand for oil is seasonal and the peak demand period begins in May.
Last week I raised my valuation of CLR to $44 and FANG to $115.
I expect more companies to release operational updates next week.