Crude oil prices rally
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.
August WTI (West Texas Intermediate) crude oil futures contracts trading in NYMEX rose for the second day by 1.33% and closed at $61.01 per barrel on Tuesday, June 23, 2015. The estimates of a falling US stockpile supported oil prices. ETFs like the United States Oil Fund LP (USO) and the ProShares Ultra DJ-UBS Crude Oil (UCO) also moved in the direction of WTI prices in yesterday’s trade. They rose by 1.54% and 2.94%, respectively, on June 23, 2015.
The EIA (U.S. Energy Information Administration) will release the weekly petroleum status report on June 24, 2015. Last week, government data showed that crude oil stocks fell by 2.7 MMbbls (million barrels) in the week ending June 12, 2015. Market estimates show that the oil stocks could fall by 2–3.2 MMbbls for the week ending June 19, 2015.
The rising demand for gasoline also supported crude oil prices. Gasoline prices rose 2.3% in yesterday’s trade. It’s a refined product of crude oil. Gasoline is used as fuel for vehicles.
This is the fourth up day for WTI prices in the last ten trading sessions. Oil prices increased by 0.62% more on the average up days than on the average down days, over the last ten days. WTI fared well against other commodities in yesterday’s trade. Prices have risen 14.33% YTD (year-to-date)—led by the rising demand from Asia and falling US oil stock.
The increase in crude oil prices is positive for oil producers like Hess (HES), Energen (EGN), and ConocoPhillips (COP). Combined, they account for 5.69% of the Energy Select Sector SPDR ETF (XLE). These companies also have a oil production mix that’s more than 54% of their production portfolio.