Crude oil prices
WTI (West Texas Intermediate) crude oil futures contracts for January delivery rose 1.0% and were trading at $52.20 per barrel in electronic trade at 4:50 AM EST on December 5, 2016. That’s the highest level in the last 16 months. However, record production from Russia at 11.2 MMbpd (million barrels per day) in November 2016 could pressure crude oil prices. It’s the highest in 30 years.
Crude oil prices could be under pressure due to the strong dollar, Donald Trump’s US presidential victory, and high crude oil, gasoline, and distillate inventories. For more on crude oil prices and the US dollar, read Part 1 of this series.
Crude oil’s lows in 2016
NYMEX (New York Mercantile Exchange) crude oil settled at $26.21 per barrel on February 11, 2016, the lowest since 2003. As of December 2, 2016, crude oil prices rose 97.2% from their 2016 lows.
Higher crude oil and natural gas prices have a positive impact on the earnings of producers such as Cobalt International Energy (CIE), Denbury Resources (DNR), Sanchez Energy (SN), ConocoPhillips (COP), Stone Energy (SGY), Occidental Petroleum (OXY), and Swift Energy (SFY).
The roller coaster ride in crude oil and natural gas prices also impacts funds such as the United States 12 Month Oil ETF (USL), the iShares US Energy (IYE), the ProShares Ultra Bloomberg Crude Oil (UCO), the United States Oil ETF (USO), the PowerShares DWA Energy Momentum ETF (PXI), the Fidelity MSCI Energy ETF (FENY), the ProShares UltraShort Bloomberg Crude Oil (SCO), the iShares Global Energy (IXC), the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), and the Energy Select Sector SPDR ETF (XLE).
For crude oil’s bearish drivers, read Iraq’s Crude Oil Production Is Important for OPEC and Is US Crude Oil Production at a Turning Point? You can also read Decoding Russia’s Crude Oil Production before OPEC’s Meeting and Will OECD Crude Oil Inventories Impact Crude Oil Prices? as well as Will Trump Impact Iran’s Crude Oil Production?
Crude oil’s highs in 2016
US crude oil prices settled at $51.68 per barrel on December 2, 2016, the highest since July 14, 2015.
To learn more about crude oil’s bullish drivers, read How Asia’s Crude Oil Imports Impact the Crude Oil Market and Gasoline Demand Impacts Crude Oil and Gasoline Prices.
In the next part of the series, we’ll look at OPEC’s upcoming meeting with non-OPEC producers.