Crude oil prices
April WTI (West Texas Intermediate) crude oil (UCO) (XLE) (USO) futures contracts fell 0.1% and closed at $54.01 per barrel on February 28, 2017. Likewise, the S&P 500 (SPY) (SPX-INDEX) and the Dow Jones Industrial Average fell 0.26% and 0.12%, respectively, on the day.
Crude oil prices’ upside was limited due to:
- expectation of a rise in US crude oil inventories to a new record level
- expectation of a rise in US crude oil production
- rise in US crude oil rigs
However, crude oil prices are trading near a 19-month high for the following reasons:
- A Reuters survey estimates that OPEC (Organization of the Petroleum Exporting Countries) showed 94% compliance with targeted production cuts in February 2017 due to major producers’ production cut deal. The deal led to a fall in OPEC’s production in January 2017 and February 2017. It helped support oil prices and rebalance the crude oil market. For latest updates, read Part 4 of the series.
- There might be an extension of major producers’ production cut deal due to record US crude oil and gasoline inventories and record OECD crude oil inventories.
- Hedge funds’ net long positions on WTI crude oil contracts are at an all-time high. For more, read the last part of the series.
The rollercoaster ride in crude oil prices impacts oil and gas exploration and production companies’ earnings such as Chevron (CVX), Continental Resources (CLR), Carrizo Oil & Gas (CRZO), and PDC Energy (PDCE).
What’s in this series?
In this series, we’ll look at OPEC’s crude oil production, the API’s crude oil inventories, US crude oil’s (USL) (XOP) (PXI) highs and lows in the last 12 months, Cushing crude oil inventories, the US crude oil rig count, and some crude oil price forecasts.
Let’s look at the US dollar and how it impacts crude oil prices in the next part of this series.