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OPEC Extended the Output Cut Deal: Stable Crude Oil Prices?

PART:
1 2 3 4 5
Part 2
OPEC Extended the Output Cut Deal: Stable Crude Oil Prices? PART 2 OF 5

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.

US Dollar and Crude Oil Futures Are Weaker: What’s Next?

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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.

A fall in the US dollar makes crude oil (BNO) (SCO) more affordable for oil importers. A depreciating dollar usually has a positive impact on crude oil prices.

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.

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