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US Gasoline Demand and China Could Drive Crude Oil Prices Higher

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US Gasoline Demand and China Could Drive Crude Oil Prices Higher PART 1 OF 6

US Crude Oil Prices Are Near a 2-Week Low

Crude oil prices  

WTI (West Texas Intermediate) crude oil (USL) (PXI) (SCO) futures contracts for May delivery fell 0.5% and settled at $52.4 per barrel on April 18, 2017. The S&P 500 (SPY) (SPX-INDEX) also fell 0.3% on the same day. Crude oil and natural gas are major parts of the energy sector. The energy sector contributed to ~6.6% of the S&P 500 as of April 14, 2017.

US crude oil prices are near a two-week low due to the following:

US Crude Oil Prices Are Near a 2-Week Low

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Major oil producers’ deal 

However, US crude oil (BNO) (IEZ) (ERY) prices hit a 20-month high on February 23, 2017, due to major producers’ production cut deal. Prices have risen 10.7% in the last 12 months due to the deal. Prices are near one-month high due to the following:

OPEC’s next meeting will be on May 25, 2017. The meeting will likely be the driving force for oil in the next two months. Moves in crude oil prices impact oil and gas exploration and production companies’ earnings such as Northern Oil & Gas (NOG), Chevron (CVX), ExxonMobil (XOM), and Denbury Resources (DNR).

Post-settlement trade  

US crude oil prices fell in post-settlement trade on April 18, 2017, after the release of the API’s (American Petroleum Institute) crude oil inventory report.

Market focuses on US crude oil inventories 

The U.S. Energy Information Administration will release its weekly crude oil inventory report on April 19, 2017, at 10:30 AM EST. We’ll look at the API’s estimates for US crude oil and gasoline inventories in Part 3 and Part 4 of this series.

In this series, we’ll also discuss US gasoline demand and China’s crude oil imports. Let’s start with US crude oil prices in early morning trade on April 19, 2017.

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