EIA Drawdown Report Sparks Furious Rally in Crude

WTI’s gains are nearing 3%, after an EIA report said there was a larger than expected drawdown in crude supplies. As such, oil stocks are racing higher. But before you go out to buy a basket of oil stocks, bear in mind it is the worst performing industry in the market this year — with losses in the range of -25%. Moreover, even after today’s 3% returns, they’re still down over 6% on a median basis over the past month.

EIA Petroleum Inventory Data follow-up The EIA reports that for the week ending May 5:
Crude oil inventories had a of draw of 5.25 mln barrels (consensus called for a draw of about 1.8-2.0 mln)
Gasoline inventories had a draw of 0.150 mln barrels (consensus called for a draw)
Distillate inventories had a draw of 1.59 mln barrels

Today’s best performers are the one’s with the largest short positions, such as JONE, REN, CRC and SN.

For me to be interested in crude again, I’d need to see more than a mean reversion move to the upside. We need multiple up days to confirm real interest in the space and not just an oversold bounce.