Crude Oil Prices Fell and Dragged S&P 500 Down
Crude oil prices
US crude oil (VDE) (RYE) (XLE) futures contracts for July delivery fell 0.3% and closed at $49.66 per barrel on May 30, 2017. Brent crude oil futures also fell 0.9% and closed at $51.84 per barrel on the same day.
Prices fell for the second day this week due to the oversupply concerns mentioned below:
- US crude oil rigs have risen 128.5% year-over-year.
- Libya’s crude oil production is on the rise.
- OPEC extended the production cut deal for nine more months, but traders are concerned whether it will actually remove surplus oil.
- The lack of an exit strategy for OPEC’s production cut deal also weighed on oil prices.
- US crude oil output has risen 6.3% year-over-year.
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US crude oil prices are down ~3.1% after the OPEC meeting. Crude oil prices are also down 13.1% YTD. Oil and gas are major parts of the energy sector and constitute 6.1% of the sector as of May 30, 2017. The energy sector is down 13.3% YTD. Energy companies have been the worst-performing companies in the S&P 500 (SPY) (SPX-INDEX).
Oil and gas producers such as Whiting Petroleum (WLL) and SM Energy (SM) fell 8.7% and 8.0%, respectively, on May 30, 2017. Consequently, the energy sector fell 2.2% on the same day. The S&P 500 (SPY) (SPX-INDEX) fell 0.1% to 2,412.9 on May 30, 2017, from its record. The fall in the energy sector dragged down the S&P 500 on May 30, 2017. The energy sector is also limiting the upside for the S&P 500 in 2017.
Market focus moves towards API’s crude oil inventory report
On May 31, 2017, the API (American Petroleum Institute) will release its weekly crude oil inventory report. Follow the series to learn more.
Let’s start with US crude oil prices in early morning trade on May 31, 2017, and Libya’s crude oil production.