Factors impacting crude oil
The WTI March contract closed at $30.89—around 2.8% below its previous day closing. On a weekly basis, it closed around 8% below the preceding week. The OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC deal and a weaker dollar helped crude oil prices rally in the last two weeks. However, as the possibility of talks fade with the failure of Syrian peace talks, crude may not be able to sustain its gains. OPEC is led by Saudi Arabia. The production cut talks can only be possible if Saudi Arabia agrees to it. So far, no official statements have been released by Saudi Arabia about a possible production cut meeting as the talk are in progress. This series will focus on the following points.
- Saudi Arabia’s importance in OPEC
- Impact of the US Dollar Index on crude oil
- Moving average analysis of domestic as well as international oil and gas companies and a look at renewable energy companies
Energy sector is trading at a multi-year low
ConocoPhilllips (COP) is inching towards its lows of February 2009. The multi-year low is at about $28.47. Currently, the stock trades at 32.90. Other stocks such as Denbury Resources, Kosmos Energy (KOS), Anadarko Petroleum (APC), Apache (APA), and others are also trading at multi-year lows.
The above graph shows the price performance of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) since 2008. In the next part, we’ll discuss Saudi Arabia’s importance in OPEC.