Crude oil price movement
April WTI (West Texas Intermediate) crude oil futures contracts fell by 3.7% and settled at $36.5 per barrel on March 8, 2016. Brent crude oil prices also fell by 2.9% and closed at $39.7 per barrel. Prices fell due to profit-booking and the consensus of the rising US crude oil inventory. ETFs like the United States Oil Fund (USO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) fell lower with crude oil prices. USO and UCO fell by 4.6% and 8.4%, respectively, on March 8. The SPDR S&P 500 ETF (SPY) also fell by 1.1% to $198.36 on the same day.
Profit-booking and Kuwait’s comments
WTI crude oil prices fell for the second time in the last seven days. Oil traders squared off their long positions ahead of the crude oil inventory report. Meanwhile, Brent crude oil prices fell for the first time in the last seven days. Kuwait is one of OPEC’s (Organization of the Petroleum Exporting Countries) key members. It reported that it would freeze crude oil production only if large members like Iran supported the crude oil production deal. On February 16, 2016, Russia, Saudi Arabia, Venezuela, and Qatar decided to freeze the crude oil production at January 2016 levels. This also limited the upside for Brent crude oil prices. To learn more about the historic deal, read Why Crude Oil Prices Fell despite the OPEC and Non-OPEC Deal. You can also read Did Saudi Arabia Keep Its Word and Freeze Crude Oil Production? and Why OPEC’s Crude Oil Production Fell in February 2016. Read Did Russia Follow the New Crude Oil Production Deal? to learn more about Russia’s crude oil production.
Brent and WTI crude oil prices trade close to 2016 peak
Crude oil prices rose almost 40% from the lows in February 2016. They’re trading close to the 2016 highs. The recent rally benefits upstream players like Energy XXI (EXXI), Linn Energy (LINE), Denbury Resources (DNR), Carrizo Oil & Gas (CRZO), Cobalt International Energy (CIE), and Goodrich Petroleum (GDP).
ETFs like the Vanguard Energy ETF (VDE), the SPDR S&P Oil & Gas Equipment & Services ETF (XES), and the First Trust Energy AlphaDEX Fund (FXN) are also influenced by the ups and downs in the oil market.
In this series, we’ll discuss the crude oil price forecasts. We’ll also investigate crude oil, gasoline, and distillate inventories and how they impact crude oil prices.