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Crude Oil Prices Change Marginally: Led by China’s Imports

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Crude oil price action

Below is our crude oil price and fundamental analysis. For an in-depth fundamental look at crude oil and related companies, sectors, and drivers, please refer to our Energy and Power page.

NYMEX-traded June WTI (West Texas Intermediate) crude oil futures gained slightly by 0.76% and settled at $59.39 per barrel on May 8, 2015. Crude oil prices changed marginally—led by the appreciating dollar and the consensus of an improved demand outlook. The United States Oil Fund LP (USO) and the ProShares Ultra DJ-UBS Crude Oil (UCO) leveraged crude oil price movements. USO and UCO rose by 1.09% and 2.01%, respectively, on Friday.

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In April 2015, China imported 30.29 million tonnes of crude—compared 26.81 million tonnes in March 2015. China is continuing to increase its stockpile despite the global crude oil glut. Lower crude oil prices might push China to increase stockpiles. Crude oil imports from China were up by 13% month-over-month—this drove oil prices higher. The imports were 8.6% more than last year. This makes China the largest crude oil importer—it surpassed the US.

Last week, on May 6, 2015, the EIA (U.S. Energy Information Administration) reported that US crude oil inventories decreased by 3.9 MMbbls (million barrels)—compared the industry estimates of 1.2 MMbbls for the week ending May 1. This was the biggest weekly crude oil decline in 2015. The next EIA report is due on May 13, 2015.

WTI crude oil prices increased for the sixth day for the past ten trading sessions. Prices rose by 0.55% more on the average up days than on the average down days, over the last ten trading sessions. WTI had an average performance across other commodities on Friday. Crude oil increased 11.47% YTD (year-to-date)—led by the improving demand outlook and slowing US output.

Volatility in the crude oil market affects energy producers like Hess (HES), Murphy Oil (MUR), and Newfield Exploration (NFX). They account for 2.22% of the Energy Select Sector SPDR ETF (XLE). These companies have a crude oil production mix that’s greater than 40% of their total production.

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