Crude oil price drivers
Let’s take a look at some key bullish catalysts for crude oil prices.
Bullish drivers for crude oil prices
- The rise in gasoline demand in 2016 compared to 2015 has boosted gasoline prices. Consequently, it boosted crude oil prices. For more on gasoline prices, read the previous part of this series. You can also read about gasoline demand at Analyzing the US Crude Oil Inventory and Gasoline Demand.
- The API (American Petroleum Institute) estimated that nationwide, crude oil stocks fell by 1.1 MMbbls (million barrels) for the week ended April 22, 2016, compared to the previous week. The fall in API crude oil stocks supported crude oil prices in the post-settlement trades on April 26, 2016. For more on API crude oil stocks, read Part 5 of this series.
- The expectation of slowing US crude oil production in the lower 48 states of the United States could support crude oil prices. US crude oil production fell for the 12th straight week to 9.0 MMbpd (million barrels per day) for the week ended April 15, 2016. For the latest on US crude oil production, read Did US Crude Oil Production Fall for the 12th Consecutive Week?
- On April 20, 2016, the three-day oil workers strike in Kuwait brought down crude oil production from 8 MMbpd to 1.1 MMbpd. It also supported crude oil prices. For more on this, read Crude Prices Rose Due to Supply Outage in Kuwait: What’s Next?
- The depreciating US dollar also supported crude oil prices. Read the previous part of this series to learn more.
Impact on oil companies and ETFs
The rise in crude oil prices benefits oil and gas producers such as Halcon Resources (HK), Energy XXI (EXXI), Bonanza Creek Energy (BCEI), and Sanchez Energy (SN). They also influence ETFs and ETNs such as the United States Brent Oil ETF (BNO), the iShares US Oil Equipment & Services ETF (IEZ), the Direxion Daily Energy Bear 3X ETF (ERY), and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).
Read the next part of this series to learn more about bullish drivers for crude oil prices over the short term.