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US Crude Oil Prices Are Almost Flat as the US Dollar Depreciates

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Nov. 20 2020, Updated 3:17 p.m. ET

Crude oil prices flat 

WTI (West Texas Intermediate) crude oil futures contracts for December delivery rose slightly by 0.26% and closed at $46.06 per barrel on Thursday, October 29, 2015. Prices rose for the second day due to technical buying activity and the depreciating US dollar. ETFs like the United States Oil ETF (USO) and the ProShares Ultra DJ-UBS Crude Oil ETF (UCO) diverged from the direction of US crude oil prices in yesterday’s trade. These ETFs fell by 0.41% and 0.98%, respectively, on October 29, 2015.

[marketrealist-chart id=773082]

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Technical buying and the US dollar 

The US crude oil prices hit monthly lows of $42.58 per barrel on Tuesday, October 27, 2015. Since then, the prices recovered due to technical buying for the last two days. Bottom fishing is also driving crude oil prices higher in the depressed energy market. Even the depreciating US dollar supported crude oil prices in yesterday’s trade. The rise in oil prices benefits oil producers like Newfield Exploration (NFX) and Range Resources (RRC). In contrast, it negatively influences oil refiners like Tesoro (TSO) and Valero Energy (VLO).

US economic growth 

On Thursday, October 29, 2015, the U.S. Department of Commerce reported that the US economy grew by 1.5% in 3Q15—compared to growth of 3.9% in 2Q15. The US dollar reacted to the economic growth data and depreciated in yesterday’s trade. However, the oil markets held on to their rally despite the soft US growth data. The US is the largest crude oil consumer.

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Refinery demand 

The US crude oil refinery demand rose to the highest level in the last three weeks. Crude oil refiners operated at 87.6% for the week ending October 23, 2015. In contrast, it fell to the lowest level of 86% for the week ending October 9, 2015. This was the lowest level since January 2015. Refineries usually undergo maintenance during September and October. The rise in the refinery demand signals a possible end to the refinery maintenance season.

Volatility 

December WTI crude oil futures rose for the fifth time in the last ten trading sessions. Prices fell by 0.28% more on the average down days than on the average up days, over the same period. WTI oil had an average performance against other commodities in yesterday’s trade. Crude oil prices fell by 14% YTD (year-to-date) due to oversupply concerns. ETFs like the iShares Global Energy (IXC) and the iShares US Oil Equipment & Services ETF (IEZ) are also impacted by the volatility in the energy market.

In this series, we’ll look at crude oil prices and fundamentals. For an in-depth fundamental look at oil and gas and related companies, sectors, and drivers, visit Market Realist’s Energy and Power page.

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