Crude oil prices
WTI (West Texas Intermediate) crude oil futures contracts for January delivery rose 1.3% and were trading at $46.9 per barrel in electronic trade at 4:35 AM EST November 21, 2016. US crude oil prices recovered from almost two-month lows on November 14, 2016. Crude oil prices were under pressure due to skepticism around OPEC’s ability to deliver cuts, the strong dollar, Donald Trump’s victory, and high crude oil, gasoline, and distillate inventories. However, Brent and WTI crude oil rose ~5% in the last week—their first weekly gains in about a month. For more on crude oil prices and the US dollar, read Part 1 in this series.
Crude oil’s lows in 2016
NYMEX crude oil settled at $26.21 per barrel on February 11, 2016—the lowest level since 2003. As of November 18, 2016, crude oil prices were up 77% from their 2016 lows.
Higher crude oil and natural gas prices have a positive impact on producers’ earnings such as Cobalt International Energy (CIE), Occidental Petroleum (OXY), ExxonMobil (XOM), Synergy Resources (SYRG) and Swift Energy (SFY).
Volatility in crude oil and natural gas prices also impacts funds such as the United States 12 Month Oil ETF (USL), the PowerShares DWA Energy Momentum ETF (PXI), the Fidelity MSCI Energy ETF (FENY), the iShares US Energy (IYE), the ProShares UltraShort Bloomberg Crude Oil (SCO), the iShares Global Energy (IXC), the ProShares Ultra Bloomberg Crude Oil (UCO), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the Energy Select Sector SPDR ETF (XLE).
Crude oil’s highs in 2016
US crude oil prices settled at $51.60 per barrel on October 19, 2016—the highest settlement since July 14, 2015. As of November 18, 2016, US crude oil prices were 10.2% below their 2016 highs.
To learn more about bullish drivers for crude oil, read How Asia’s Crude Oil Imports Impact the Crude Oil Market and Why US Gasoline Demand Is Important for Crude Oil Prices. In contrast, read OPEC’s Crude Oil Production Hit a Record, Is US Crude Oil Production at a Turning Point? and Will Trump Impact Iran’s Crude Oil Production? for bearish drivers of crude oil.
In the next part of the series, we’ll look at OPEC’s upcoming meeting.