Crude oil prices 

July WTI (West Texas Intermediate) crude oil futures contracts trading on NYMEX (New York Mercantile Exchange) rose by 0.33% and settled at $49.17 per barrel on Thursday, June 2, 2016. Brent crude oil futures rose by 0.64% to close at $50.04 per barrel. US crude oil prices rose due to the decline in US crude oil inventories. Brent crude oil prices rose despite the failure of the OPEC meeting held on June 2, 2016, to reach an agreement on an output ceiling. The United States Oil ETF (USO) and the ProShares Ultra Bloomberg Crude Oil (UCO) fell 0.5% and 1.1%, respectively, on June 2.

OPEC Failed to Set an Output Ceiling but Crude Oil Rose

OPEC meeting

OPEC’s bi-annual meeting was held in Vienna on June 2, 2016. The OPEC members failed to reach an agreement on a collective output target. This means OPEC members could produce more to offset lower crude oil prices and meet their budget deficits. They could also produce more to compete with rivals like the US and Russia. However, some members are struggling due to lower oil prices, so some OPEC delegates hinted at a proposal to freeze the output to unify OPEC members and boost oil prices ahead of the OPEC meeting.

For more on OPEC’s meeting and oil prices, read How Did Crude Oil Prices React to the Last 3 OPEC Meetings? and OPEC’s Crude Oil Production and Strategy Ahead of Its Meeting.

Some OPEC members also said that because the oil market is rebalancing, an output ceiling wasn’t necessary. Crude oil prices are up more than 80% since the lows of February 2016.

Iran and Saudi Arabia

Iran’s oil minister, Bijan Zanganeh, stated that Iran would target production of four MMbpd and won’t support any strategy to freeze the output. Read Iran: Boon or Bane for the Crude Oil Market in 2016? to learn more.

Saudi Arabia’s energy minister stated that Saudi Arabia’s role should be to produce more when there is a supply shortage and crude oil prices shoot up. It doesn’t propose a collective production target. Read What’s Saudi Arabia’s State of Mind before OPEC’s Meeting? to learn why.

US crude oil inventories

The EIA (U.S. Energy Information Administration) released the crude oil inventory report on June 2, 2016. Read the next part of the series to learn more. Crude oil prices are trading at close to seven-month highs. High crude oil prices benefit oil and gas producers like WPX Energy (WPX), Swift Energy (SFY), and Energy XXI (EXXI). The roller coaster ride in crude oil prices impacts ETFs and ETNs (exchange-traded notes) such as the ProShares UltraShort Bloomberg Crude Oil (SCO) and the Fidelity MSCI Energy ETF (FENY).

Series focus

In this series, we’ll cover US crude oil production and imports, refinery demand, and US gasoline and distillates prices and inventories. Let’s start by looking at US crude oil inventories in the next part of the series.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.