uploads/2015/12/WTI-Brent-Price-Movements-2015-12-021.jpg

Brent Crude Oil Prices Fell More than WTI Prices

By

Updated

Crude oil prices

WTI (West Texas Intermediate) crude oil prices closed at $41.85 per barrel on December 1. The prices rose by $0.15 or ~0.35% per barrel on December 1—compared to $41.71 per barrel on November 27.

Brent crude oil prices closed at $44.44 per barrel on December 1. They fell slightly by $0.42 or ~0.9% per barrel on December 1—compared to $44.86 per barrel for the week ending November 27.

Article continues below advertisement

WTI price recap

Both of the crude oil benchmarks were positive in the last week. However, higher-than-expected inventory builds were reported by the EIA (U.S. Energy Information Administration) in the last week. This pulled back the prices. They settled at $41.71 per barrel for the week ending November 27. Lower demand for the refined products was one of the main reasons for the fall in WTI crude oil prices. The prices touched $43 per barrel on November 25.

This week, energy investors are very cautious and enthusiastic about the outcome of OPEC’s (Organization of the Petroleum Exporting Countries) meeting. It will be held in Vienna on December 4. So, the crude oil prices are almost steady. After the EPA (Environmental Protection Agency) increased the amount of biofuel that’s mixed in motor fuel on November 30, the refiners required more fuel to meet the US renewable standards. WTI prices increased from $41.65 per barrel on November 30 to $41.85 per barrel on December 1.

Brent prices fell from $44.61 per barrel on November 30 to $44.44 per barrel on December 1 after the news that OPEC won’t cut the production ahead of the meeting on December 4.

What’s the impact?

A rise in the crude oil prices results in more revenue for crude oil producers. Higher prices allow producers to sell their produced products at higher prices than before. This increases crude oil producers’ profitability like ConocoPhillips (COP), Murphy Oil (MUR), Occidental Petroleum (OXY), Apache (APA), EOG Resources (EOG), and Cimarex Energy (XEC). In contrast, lower crude oil prices yield lower returns for oil producers.

Higher crude prices also have a positive impact on ETFs like the Energy Select SPDR ETF (XLE) and the iShares US Oil & Gas Exploration & Production ETF (IEO). These ETFs invest in some of the companies mentioned above.

Advertisement

More From Market Realist