Crude oil prices rise
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 rose marginally by 0.75% and settled at $59.97 per barrel on June 16, 2015. Prices rose despite oversupply worries on the speculation that tropical storms could hamper oil production. The US benchmark following ETFs like the United States Oil Fund LP (USO) and the ProShares Ultra DJ-UBS Crude Oil (UCO) also increased in yesterday’s trade. They rose slightly by 0.55% and 1.18%, respectively, on June 16, 2015.
Yesterday, the API (American Petroleum Institute) published its weekly crude oil inventory estimates. The API data showed that the weekly stockpile fell by 2.9 MMbbls (million barrels) in the week ending June 12, 2015. Last week, the API estimated that the oil stockpile fell by 6.7 MMbbls in the week ending June 5, 2015. The next EIA (U.S. Energy Information Administration) stockpile data will be released on Wednesday, July 17, 2015. Last week, the government data showed that crude oil stocks dropped by 6.8 MMbbls for the week ending June 5, 2015. Market consensus suggests that oil stocks could drop 1.833–2.5 MMbbls over the same period.
Topical Storm Bill is strengthening. It’s already impacting the Gulf Coast in Texas. The tropical storm could bring heavy rain and strong winds. This could lead to flooding. It could impact offshore oil production. The initial estimates suggest that production won’t be hampered.
WTI crude oil futures rose for the fourth time in the last ten days. Prices increased by 0.40% more on the average up days than on the average down days in the last ten trading sessions. WTI had an average performance with respect to other commodities in yesterday’s trade. Oil prices rose more than 12% YTD (year-to-date)—led by the demand from Asia and the dropping US stockpile.
Fluctuating crude oil prices affect upstream players like Hess (HES), Pioneer Natural Resources (PXD), and ConocoPhillips (COP). They account for 5.75% of the Energy Select Sector SPDR ETF (XLE). These companies also have a crude oil production mix that’s more than 54% of their production portfolio.