Oil price movement
Brent and WTI (West Texas Intermediate) prices gained momentum last week. The benchmarks closed at $63.45 and $55.74, respectively, on Friday, April 17—compared to the previous Friday, April 10, when they closed at $57.87 and $51.64, respectively. The weekly increase for the benchmarks were ~10% and ~8%, respectively.
Higher prices are profitable for companies like Anadarko Petroleum (APC), Chevron (CVX), ExxonMobil (XOM), and ConocoPhillips (COP). All of these companies are part of the iShares Global Energy ETF (IXC). They account for ~26% of the ETF.
Crude prices started the week on a somewhat flat note. WTI and Brent settled at $51.91 and $57.93 on Monday, April 13—compared to the previous market close of $51.64 and $57.87 last Friday.
On Tuesday, WTI prices rallied ~3%, while Brent didn’t rally—it rose ~0.9%. Prices were supported by market speculation that US crude oil production was nearing its peak. They were also supported by the weaker dollar.
WTI settled at $53.29, while Brent inched up to settle at $58.43 on Tuesday.
Prices continued to rally into Wednesday, after the EIA’s (U.S. Energy Information Administration) report for the week ending April 3 showed a less-than-expected crude inventory build. Read Latest Crude Inventory Reveals Bullish Development to learn more.
WTI soared by ~6% to settle at $56.39, while Brent increased by 3.2% to settle at $60.32 on Wednesday.
Prices continued to rise the next day as well—due to continued expectations of US production declining and supply concerns easing. Also, according to an OPEC (Organization of the Petroleum Exporting Countries) monthly report, US output of crude oil and NGLs (natural gas liquids) was forecasted to start declining in 3Q15.
WTI prices increased ~0.6% to settle at $56.71, while Brent prices increased 6% to settle at $63.98 on Thursday. Both of the benchmarks touched their highest level, so far this year, last Thursday.
Prices declined slightly on Friday due to skepticism about whether or not US crude production was leveling.
In the next part of this series, we’ll discuss trends in the WTI-Bent spread.