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Crude Oil Prices Are Trading Close to One-Month High

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Crude oil prices

September WTI (West Texas Intermediate) crude oil futures contracts trading on NYMEX (New York Mercantile Exchange) were trading at $46.17 per barrel in electronic trade at 7:00 AM EST on August 17, 2016. Prices fell 0.88% ahead of the US crude oil inventory report. For more on that report, read the next part of this series.

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Supply and demand 

On August 11, 2016, the IEA (International Energy Agency) reported that production could lag demand by 1 MMbpd (million barrels per day) in 3Q16. It added that the oversupply that has plagued the oil market the last couple of years would diminish in the second half of 2016. But Barclays estimates that crude oil demand will slow down in 3Q16 compared to last year due to slowing global economic growth.

WTI crude oil settled at $26.21 per barrel on February 11, 2016, the lowest level since 2003. WTI crude oil prices could feel the heat due to easing supply outageshigh OPEC, and Russian crude oil production. On August 16, 2016, prices were up by 77% from their 2016 lows.

High crude oil prices positively impact the earnings of crude oil and gas producers such as Northern Oil & Gas (NOG) and Cobalt International Energy (CIE). The ups and downs in oil and gas prices also affect funds such as the United States 12 Month Oil ETF (USL), the ProShares UltraShort Bloomberg Crude Oil (SCO), and the Vanguard Energy ETF (VDE).

Crude oil peak in 2016

On June 8, 2016, US crude oil prices touched $51.53, their highest level since July 2015. For bullish drivers, read India Crude Oil Imports from Iran Hit 7-Year High and China’s Crude Oil Imports: Tussle between the Bulls and Bears. On August 16, 2016, crude oil prices fell by 9.6% from their 2016 highs.

The 52-week range for WTI crude oil prices is $32.85–$54.91 per barrel. Notably, WTI oil prices fell by 4.8% in the last year. But they have risen by 9.3% on a year-to-date basis. Crude oil prices are also trading close to their one-month high. 

In the next part of the series, we’ll look at the American Petroleum Institute’s crude oil inventories.

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