This has to be the most bullish oil market chart that any of us have seen in years.
I told you……this is incredibly bullish.
The chart tracks the number of days’ worth of crude that the United States has in storage and compares it to the five year average.
Total days of crude supply is a much more useful figure than just total crude in storage. This doesn’t just look at the storage figure — it also considers how quickly that crude is being consumed.
Which is what matters!
What I want you to focus on is where we are today…..breaking through the bottom of the five year average. Today we have the least amount of crude in storage relative to demand than we have had in years.
The oil glut is long gone.
What I find even more bullish is how quickly this situation has changed.
Please turn your attention to the line in the chart that depicts 2017 storage levels. Through the first nine months of last year storage levels were at the very top of the five year average.
Then starting in October those inventory levels started plunging and haven’t stopped.
That is the most important thing to take away from this chart……the SPEED of the days of inventory cover shrinkage.
Just because we are at the bottom of the five year average of days of inventory doesn’t mean that the inventory drawdown is going to stop. The daily supply and demand fundamentals that caused this still exists.
My point is that the oil market is only going to keep getting tighter.
Now the best part for investors. Energy stocks are still at rock bottom valuations — they are dirt cheap.
So cheap, you don’t need to go down-market to get leverage—you can buy the best companies at historically low valuations. Buying quality at a discount is what I wait for and why I was buying oil stocks this week.
There is one particular US oil stock that is so good I haven’t just started buying it lately…..I’ve been buying it steadily for months. That is because this is a company that can thrive in all oil price environments…….and especially as prices rise.
I believe that this company is the best way for all investors to play this tightening oil market. It just announced ANOTHER dividend increase. (How many oil companies are so profitable they are increasing dividends?)
You can get out in front of this trade by clicking HERE.