US Dollar and Crude Oil Futures Are Weaker: What’s Next?
Crude oil futures and moving averages
July WTI (West Texas Intermediate) crude oil (XLE) (UCO) (IEZ) futures fell 0.4% and were trading at $49.6 per barrel in electronic trade at 6:15 AM EST on May 27, 2017. Prices fell due to oversupply concerns despite the output cut deal extension until March 2018. For more on the deal and prices, read Part 1 of the series.
WTI crude oil futures are above their 20-day moving average of $48.8 as of May 26, 2017. However, US crude oil prices are below their 50-day, 100-day, and 200-day moving averages of $50.1, $52.2, and $52 per barrel as of May 26, 2017.
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US crude oil prices are near a one-month high. Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Comstock Resources (CRK), Chevron (CVX), Northern Oil & Gas (NOG), and Triangle Petroleum (TPLM). For more on crude oil prices, read Part 1 and Part 4 of this series.
US Dollar Index and President Trump
The US Dollar Index rose 0.2% to 97.4 on May 26, 2017. A better-than-expected rise in 1Q17 US GDP supported the US dollar. However, the US dollar fell 0.1% to 97.3 in electronic trade at 6:15 AM EST on May 27, 2017.
The US Dollar Index has fallen 5.6% from its 14-year high in January 2017. The dollar (UUP) is near a seven-month low. President Trump’s inability to deliver tax reform and fiscal stimulus weighed on the US dollar and impacted broader indexes like the S&P 500 (SPY) and Dow Jones.
In the next part, we’ll discuss the energy calendar for this week. We’ll also discuss how US oil prices moved in the last 15 months.