Geopolitical Tension: Rollercoaster Ride for Crude Oil Prices?
Crude oil prices
July WTI (West Texas Intermediate) crude oil (VDE) (XLE) (USO) futures contracts fell 0.5% to $47.4 per barrel on June 5, 2017. Likewise, Brent crude oil futures fell 0.9% to $49.47 per barrel on the same day. The S&P 500 (SPY) (SPX-INDEX) fell 0.12% to 2,436.1 on June 5, 2017. SPY hit a record on June 2, 2017.
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Crude oil prices fell on June 5, 2017, due to geopolitical tension. Lower prices caused speculation that the production cut deal extension might collapse. The production cut deal was announced at OPEC’s meeting on May 25, 2017. There could be a rise in supplies among OPEC members.
US crude oil prices rose 1.4% and were trading at $48.3 per barrel in electronic trade at 1:45 AM EST on June 5, 2017. Crude oil prices ended the day lower. The rollercoaster ride in oil prices also impacts oil producers. Oil majors producers ExxonMobil (XOM) and Chevron (CVX) rose 0.78% and 0.1%, respectively, on June 5, 2017. Meanwhile, SM Energy (SM) rose 4% on the same day.
On June 5, 2017, Saudi Arabia, the United Arab Emirates, Egypt, and Bahrain cut ties with Qatar. Qatar has been accused of promoting terrorism and causing regional instability. Reuters surveys estimate that Qatar produced 620,000 barrels per day of crude oil in May 2017.
In the next part, we’ll look crude oil prices during early morning trade on June 6, 2017. We’ll also discuss Saudi Arabia’s crude oil pricing to Asia.