Oil price recovered to stay above $48 a barrel level on Wednesday after a positive data suggested that 531,000 barrel drop in crude stocks. This is in sharp contrast to the three million barrel estimated by economists or analysts. That should help stocks like Exxon Mobil Corporation (NYSE:XOM), Chevron Corporation (NYSE:CVX), Royal Dutch Shell plc (ADR) (NYSE:RDS.A) And BP plc (ADR) (NYSE:BP) on Wednesday.
Inventory data will be released a few hours later today and if the data confirms the reported figures, then it would be the first weekly drop after nine weeks. On Tuesday, oil price slid during the day after Saudi Arabia lifted its production by 263,000 barrels to 10.011 million barrels per day in February though it was below the agreed limit.
In last four-five trading sessions, oil price has been trading below the psychological $50 a barrel level thus worrying investors about the future of oil stocks. Though oil price recovered today, there are still doubts about the strength of its recovery due to several other factors. For instance, rig counts in the United States have been increasing thus lifting the production pace.
Also, another data from International Energy Agency suggested that demand for oil could fall to 1.4 million barrels per day in the current year from 1.6 million barrels recorded in 2016. The agency also disclosed that initial indications supported its view pointing out the slowdown in countries like India, Korea, Japan, and Germany. At time of writing this, oil price gained 1.72 percent to trade at $48.54.
The following oil companies could be watched on Wednesday:
- Royal Dutch Shell plc (ADR) (NYSE:RDS.A) gained 1.00 percent in pre-market trading.
- BP plc (ADR) (NYSE:BP) advanced 1.56 percent in pre-market trading.
- Exxon Mobile Corporation (NYSE:XOM) added 0.21 percent in extended hours trading on Tuesday.
- Chevron Corporation (NYSE:CVX) traded up 0.40 percent in after-hours trading on Tuesday.
- ConocoPhillips (NYSE:COP) added 0.58 percent in extended hours trading on Tuesday.
- Marathon Oil Corporation (NYSE:MRO) gained 1.17 percent in after-hours trading.
- Total SA (ADR) (NYSE:TOT) edged up 0.20 percent in after-hours trading on Tuesday.