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Crude Oil Price Roller Coaster Ride Continues in 2016

Gordon Kristopher - Author
By

Jul. 18 2016, Published 4:56 p.m. ET

Energy calendar 

Let’s take a look at what’s coming up in the energy sector this week:

Monday, July 18: 

  • The EIA’s (U.S. Energy Information Administration) Drilling Productivity Report

Tuesday, July 19: 

  • The API’s (American Petroleum Institute) crude oil inventory report

Wednesday, July 20:

  • The EIA’s (U.S. Energy Information Administration) Petroleum Status Report. For information on the last report, you can read US Crude Oil Inventories: Down for 8th Straight Week.
  • The EIA’s “This Week in Petroleum” report

Thursday, July 21:

Friday, July 22:

  • Baker Hughes’s US crude oil rig count
  • Baker Hughes’s US natural gas rig count
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Nigeria supply outage uncertainty 

August West Texas Intermediate crude oil futures contracts were trading at $45.71 per barrel in electronic trade at 6:35 AM EST on July 18, 2016.

Militant attacks in Nigeria led to the decline in Nigeria’s crude oil production in May 2016. Production increased in June 2016. However, expectations of fresh militant threats and technical issues in Nigeria suggest uncertainty over crude oil production. This could positively impact crude oil prices. For more details, read Global Supply Outage Played a Vital Role in Driving Crude Oil.

ExxonMobil experienced a “system anomaly” on July 14 at its Nigerian facilities. As a result, ExxonMobil (XOM) declared force majeure on exports from Nigeria. This technical issue will take at least two to four weeks to repair, which will impact crude oil production and export activity.

Crude oil peaks and lows in 2016 

WTI crude oil settled at $26.21 per barrel on February 11, 2016, the lowest level since 2003. For more on bearish drivers, read OPEC and Russia: More Negative Forces for Crude Oil Market.

On June 8, 2016, US crude oil prices touched $51.53, their highest level since July 2015. Read Will High Gasoline Demand and Slowing US Production Affect Prices? to learn more.

The roller coaster ride in crude oil prices impact oil and gas producers such as Concho Resources (CXO), Denbury Resources (DNR), and PDC Energy (PDCE). It also impacts funds such as the United States 12 Month Oil ETF (USL), the DB Crude Oil Double Short ETN (DTO), and the Vanguard Energy ETF (VDE).

In the next part of this series, we’ll discuss Cushing crude oil inventories and how they impact crude oil prices.

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