Crude Oil May Face Sell-Off If DOE Report Reflects Notable Build In Crude; SLB Offers An attractive Entry Point

According to Susquehanna Financial, crude oil continued its upward movement today as the dollar moved lower and futures pointed towards a higher open in the equity market. The DOE report, scheduled to be announced later today, is expected to show a significant rise in the supplies of crude oil and similar data and decline in distillates. If the report depicts a notable build in crude, “it could lead to a sell-off in energy prices at these levels. There is no shortage of crude and prices above $80/barrel may be hard to hold if reports continue to show firm supply combined with modest demand,” the analysts say.

Analyst Charles Minervino of Susquehanna Financial upgraded Schlumberger Limited (NYSE: SLB) to “positive.” The target price for SLB is set to $75. According to Susquehanna Financial, SLB is “well positioned to benefit from the next leg of catalysts across the sector and the recent weakness in the shares provides an attractive entry point. Catalysts include improving offshore drilling activity levels, a recovery in international drilling programs in 2H10, high exposure to key international regions, and better than expected synergies from the pending SII acquisition.”

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