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Crude Oil Prices Fall More than 2% on Greece’s Default Crisis

Gordon Kristopher - Author
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Nov. 20 2020, Updated 11:50 a.m. ET

Crude oil prices fall again

This series analyzes crude oil and natural gas prices and fundamentals. For an in-depth fundamental look at oil and gas and related companies, sectors, and drivers, please refer to our Energy and Power page.

NYMEX-traded WTI (West Texas Intermediate) crude oil futures contracts for August delivery fell by 2.18% and settled at $58.33 per barrel on June 29, 2015. The speculation about Greece’s default crisis dragged commodities lower—like crude oil. The US benchmark following ETFs like the United States Oil Fund LP (USO) and the ProShares Ultra DJ-UBS Crude Oil (UCO) also fell by 2.35% and 4.62% at the close of trade on June 29.

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The commodity market fell as Greece’s credit default overshadowed the global equity and commodity market. Yesterday, the Greek government informed the IMF (International Monetary Fund) that it wouldn’t be able to repay the loan that’s due on Tuesday, June 30. A Greek default might strengthen the US dollar. It could add pressure to crude oil prices. The financial crisis could also slow down the European demand for crude oil.

The API (American Petroleum Institute) is scheduled to release its weekly oil stockpile report on June 30, 2015. Last week, API data showed that crude oil stocks fell by 3.2 MMbbls (million barrels) for the week ending June 19. Over the same period, the EIA (U.S. Energy Information Administration) published that the oil stockpile fell by 4.9 MMbbls. The consensus of the falling stockpile could support crude oil prices.

Crude oil prices fell for the fourth time in the last ten days. Over the same period, prices fell by 0.88% more on the average down days than on the average up days. August WTI futures were at the bottom of the performance chart with respect to other commodities in yesterday’s trade. Oil prices have risen 9% YTD (year-to-date)—led by the falling US crude oil stockpile.

Upstream companies like Apache (APA), ExxonMobil (XOM), and Hess (HES) are impacted by the fluctuations in the crude oil market. They account for 21.63% of the Energy Select Sector SPDR ETF (XLE). These stocks also have a crude oil production mix that’s more than 54% of their total production.

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