Crude oil

Impacted by severe weather, U.S. weekly sales showed another decline last week, according to The Retail Economist-Goldman Sachs Weekly Chain Store Sales Index, which fell 0.6 percent for the period ended Saturday, Jan. 21. Year over year, though, sales showed “a very sluggish” 0.2 percent gain said Michael P. Niemira, chief economist of The Retail Economist LLC.

Meanwhile, in a separate report, analysts at Telsey Advisory Group see an expected sharp uptick in oil prices this year as benefiting some companies in the retail sector. In 2016, low fuel and energy prices weakened retail sales for companies with greater exposure in several major natural gas-producing regions. States impacted by natural gas price declines included Colorado, Utah, Wyoming and North Dakota as well as Texas with its heavy oil production.

In the sales report, Niemira said “once again sales were off in the latest week with business soft for most retail segments as adverse weather again accentuated the sales weakness.”

“Often it is hard to read too much into the tone of January, and even February, chain-store spending since those months represent low volume periods that can be further dampened by weather anomalies,” Niemira said. “Moreover, layer onto that sales performance a sluggish trend, it may not be until the spring before a clearer picture of any changes in the underlying demand is revealed.”

In the Telsey Advisory Group report, analysts at the firm said the average cost per barrel of crude oil was $43 in 2016, which compares to $49 in 2015 and around $95 during the 2011 to 2014 period. “As we know, the industry clamped down on spending in 2015 and 2016, negatively impacting jobs and wages in the oil/energy markets, which in turn created a solid sales drag on retailers and restaurants with heavy exposure to those markets,” the analysts said.

But 2017 is expected to see a shift. Citing FactSet data, the firm said a 27 percent increase this year to about $55 a barrel should “translate into increased jobs, wages, and spending in markets dependent on energy production, such as Texas and the Dakotas.”

“While higher oil and energy prices likely will increase costs for consumers at the gasoline pump and companies in the form of higher supply chain and distribution costs, spending should increase in the affected markets,” the analysts said adding that retailers and restaurants who would benefit from higher energy prices include Dillard’s, Tractor Supply Co., Wal-Mart Stores Inc. and Sonic.