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Crude Oil Prices Rise Marginally on Short Covering due to Expiry

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Nov. 20 2020, Updated 3:31 p.m. ET

Crude oil prices 

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 July delivery rose marginally by 0.12% and settled at $59.68 per barrel on June 22, 2015. Prices rallied due to the consensus of the falling US stockpile. The US benchmark following ETFs like the United States Oil Fund LP (USO) and the ProShares Ultra DJ-UBS Crude Oil (UCO) also leveraged the performance of WTI prices in yesterday’s trade. They climbed by 0.70% and 1.35%, respectively, on June 22, 2015.

July WTI crude oil futures contracts expired on June 22, 2015. The expiry led to a short covering of futures contracts by the bearish traders, despite the rising gasoline stockpile for the week ending June 12, 2015.

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In contrast, on June 17, 2015, the EIA (U.S. Energy Information Administration) reported that US oil stocks fell by 2.7 MMbbls (million barrels) in the week ending June 12, 2015. The EIA will release the next report on June 24, 2015. Market surveys show that the oil stockpile fell by 1.5 MMbbls for the week ending June 19, 2015. The falling stockpile impacted crude oil prices.

WTI rose for the fifth time in the last ten days. Prices rose by 0.55% more on the average up days than on the average down days, over the same period. Crude oil had a better-than-average performance in Monday’s trade. Prices rose more than 13% YTD (year-to-date)—led by the falling US stockpile and slowing US production.

Oil and gas producers like Murphy Oil (MUR), Energen (EGN), and ConocoPhillips (COP) are affected by the roller coaster ride of crude oil prices. They account for 5.04% of the Energy Select Sector SPDR ETF (XLE). These stocks also have a oil production mix that’s more than 54% of their production portfolio.

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