Why US Crude Oil Prices Hit Highest Level since July 2015

Crude oil prices  

April WTI (West Texas Intermediate) crude oil (BNO) (IXC) (IYE) futures contracts rose 1.6% and settled at $54.45 per barrel on February 23, 2017. Broader markets (SPY) (SPX-INDEX) rose 0.1% to 236.4 on February 23, 2017.

US crude oil prices settled at the highest level since July 2015 due to the following factors:

  • a fall in Cushing crude oil inventories by 1.6 MMbbls (million barrels) between February 10 and February 17, 2017
  • a larger-than-expected fall in gasoline and distillate inventories

Why US Crude Oil Prices Hit Highest Level since July 2015

Crude oil price drivers 

Crude oil (RYE) (XLE) (PXI) prices are trading at a 19-month high due to the possible extension of major oil producers’ production cut deal. Investors’ optimism due to hedge funds’ record net-long positions on WTI crude oil contracts also supported oil prices. For more information, read Is It the Right Time to Short Crude Oil Futures?

The crude oil volatility index fell 4.8% to 25.8 on February 23, 2017, the lowest level since October 2014. Changes in crude oil prices can impact the earnings of oil and gas producers like ExxonMobil (XOM), Triangle Petroleum (TPLM), Chevron (CVX), Warren Resources (WRES), and QEP Resources (QEP).

Why US Crude Oil Prices Hit Highest Level since July 2015

US crude oil inventories 

The EIA (U.S. Energy Information Administration) released its weekly crude oil inventory report on February 23, 2017. We’ll look at US crude oil inventories in part two of this series.

In this series 

In this series, we’ll look at US crude oil production, refinery demand, imports, and inventories. We’ll also look at gasoline and distillate inventories.

We’ll start by looking at US crude oil prices in early morning trade on February 24, 2017.