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____ Friday October 23, 2015 ____

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Chart of the Week

Oil Production One Year Later

Below is a chart of the 4-week average of US crude production. As you can see, it is still above last year's production at this time when oil was still $90 per barrel and just starting its major drop.


That said, in the last 2 months we are finally starting to see falling production but it has taken a lot longer than most have anticipated and so far it is a lot less as well. We have a lot of inventory still to work through as the chart below shows.

US crude oil inventories are piling up as refinery utilization slows. Oil in storage rose more than forecast this week.



The US has almost 100 million more barrels of oil in storage today than it normally does at this time of year. It is going to take a while to work through this excess which is going to keep a cap on any price rise for some time yet. Moral of the story is don't rush into energy stocks whole hardily just yet. That said, no one can pick the exact bottom so it is better to start easing in now rather than trying to time it exactly. This too will pass.

Mike Hayhoe, BSc, CIM® Branch Manager & Senior Investment Advisor | Independent Wealth Management Canaccord Genuity Wealth Management

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