Crude oil prices
July WTI (West Texas Intermediate) crude oil futures contracts rose by 1.9% and settled at $49.74 per barrel on Wednesday, May 25, 2016. Brent crude oil futures rose by 2.3% and closed at $49.74 per barrel. The larger-than-expected decline in US crude oil inventories supported crude oil prices.
WTI and Brent crude oil prices settled below $50 per barrel due to profit booking. Oil traders were booking profit ahead of the US Memorial Day holiday on Monday, May 30, 2016.
The EIA (U.S. Energy Information Administration) released its weekly petroleum status report on May 25, 2016. In the next part of this series, we’ll see how US crude oil inventory impacted crude oil prices.
S&P 500 hits highest level in 6 months
In the US equity market, the S&P 500 hit its highest level for the last six months on May 25, 2016. The SPDR S&P 500 ETF (SPY) also rose by 0.7% to $209.26 that day. The bullish momentum in energy stocks was reflected in the S&P 500.
However, a slowing Chinese economy and the strong US dollar could limit the upside of oil prices. The Chinese stock market is close to April 2016 lows. China is one of the largest consumers of crude oil.
Crude oil price volatility
On May 25, 2016, WTI and Brent crude oil prices settled at their highest since October 2015. Oil prices have risen more than 80% since the lows of February 2016. Read Is the Supply Side of the Crude Oil Market Rebalancing? and Demand Side of the Crude Oil Market: India Is a Bright Spot for more on supply and demand drivers and their effect on crude oil prices.
In this series, we’ll be covering US crude oil production and imports, refinery demand, and US gasoline prices and inventories. Let’s start by seeing why US crude oil inventories saw the largest decline in seven weeks.