Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
ExxonMobil (NYSE:XOM) and the energy sector led stock markets higher today, as oil prices jumped in the U.S. on a smaller-than-expected increase of U.S. oil stockpiles. After hitting all time highs earlier in the day, the Dow Jones Industrial Average (DJINDICES:^DJI) finished the day up 128 points, to 15,746, and S&P 500 (SNPINDEX:^GSPC) finished up 7 points, to 1,770.
Oil prices have dropped steadily the past two months as U.S. stockpiles have been increasing at a greater rate than expected.
Last night, the American Petroleum Institute estimated that crude-oil inventories in the nation climbed by just 817 thousand barrels last week. Today, the price of WTI crude jumped 1.6%, to $94.83, as the Energy Information Administration's Weekly Petroleum Status Report also showed that U.S. stockpiles grew slower than expected.
The report showed that U.S. stockpiles, excluding the Strategic Petroleum Reserve, increased by 1.6 million barrels, to 385.4 million barrels, a 10-year seasonal high.
This is the seventh straight week of increases. Stockpiles grew more than the American Petroleum Institute's estimate, but less than analysts' expectations of a 2.5 million-barrel addition to stockpiles, which is why prices rose.
The Dow and S&P 500 markets were buoyed today by signs that the Federal Reserve will keep its low interest rates going longer than expected. Oil majors got a further bump up by the jump in U.S. oil prices, though Brent crude was down 0.44%, to $104.87, but still remains high. ExxonMobil rose 1.3%, to $93.22, Chevron (NYSE:CVX) rose 2.24%, to $121.11, and this year's top-performing oil and gas stock, ConocoPhilips (NYSE:COP), rose 1.85%, to $73.91. Oil majors will continue to do well as long as oil prices remain at the high levels we have seen the past few years. Predicting oil prices, though, is a fool's game (with a lowercase "F"). In the short term, anything can happen.
Dan Dzombak has no position in any stocks mentioned. The Motley Fool recommends Chevron. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.