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The Energy Information Administration reported U.S. crude stockpiles above analyst expectations Thursday, but the report wasn’t as shocking as the American Petroleum Institute’s late Wednesday.
The EIA said U.S. crude-oil stockpiles rose 7.7 million barrels for the week ended Feb. 13. Late Wednesday, the American Petroleum Institute said U.S. crude-oil supplies jumped by 14.3 million barrels last week. Analysts polled by Platts forecast an increase of only 3.1 million barrels.
U.S. crude futures were down 2% to $51.12 a barrel, paring earlier losses that put prices below $50. Brent was down 0.9% to about $60, also rebounding slightly.
Oversupply fears were also fueled when the consulting firm PIRA Energy said Wednesday that Saudi Arabia may increase production to 10 million barrels per day.
Meanwhile, U.S. oil companies are continuing to scale back investments. Noble Energy (NYSE:NBL) said Thursday that it plans to slash capital spending by 40% in 2015 to $2.9 billion.
Shares fell 3.1% on the stock market today.
Also Thursday, Linn Energy (NASDAQ:LINE) cut its 2015 capital spending 65% vs. 2014 levels but only expects a minimal impact to annual production volumes. Shares fell 1.4%.
The announcements follow that of EOG Resources (NYSE:EOG), which said late Wednesday that it would cut spending this year by 40% to $5.1 billion. EOG plans to invest primarily in North Dakota and Texas. Shares were down 1%.
Oil majors like ConocoPhillips (NYSE:COP) and Chevron (NYSE:CVX) have already slashed spending. But JPMorgan reiterated a neutral rating on Exxon Mobil (NYSE:XOM) Wednesday because it hasn’t yet provided a 2015 capital spending budget. On Tuesday, Warren Buffett sold his entire $4 billion Exxon stake.
The drop in oil prices sent airline stocks rallying Thursday, as fuel accounts for one-third of carriers’ costs.
American Airlines (NASDAQ:AAL) shares rose 1.4% despite Credit Suisse cutting its price target to 60 from 65. Delta Air Lines (NYSE:DAL) shares were up 2.5%, and Southwest Airlines (NYSE:LUV) was up 1.7%.
Follow Gillian Rich on Twitter: @IBD_GRich.
