Oil Inventory Build - October 16

[dan_s]

Take a look at this chart.
http://www.oilandgas360.com/analytics/c ... 1-26406629

The EIA reported another large build in oil inventories, BUT that is normal for this time of year. Inventories are actually LOWER than they were at this point last year. Inventories always build heading into the winter heating season.

Inventories will start coming down mid-November, like they ALWAYS DO. The Weather Channel's winter forecast is BULLISH for heating oil demand.

If WTI can stabilize in the low $80s, I think it will push back to $90 by year-end. There is not a "glut of oil" in the world, as many have reported. It was the sharp rise in the U.S. dollar that caused this + an increase in exports from Libya during the low demand period of August and September. From September to December, global demand for oil will go up by a million bbls per day.

The U.S. dollar is coming down. See: http://www.marketwatch.com/investing/index/dxy/charts

Our Sweet 16 and the other model portfolio companies are grossly oversold. You can find my valuations for the Sweet 16 companies (now based on WTI averaging $85/bbl for 2015) under the Sweet 16 Tab. They are all going to report strong 3rd quarter results beginning the last week of October.