Crude oil prices
WTI (West Texas Intermediate) crude oil (ERY) (ERX) (IXC) futures contracts for May delivery rose 0.6% and closed at $47.97 per barrel on March 24, 2017. Broader markets like the S&P 500 (SPY) (SPX-INDEX) and the Dow Jones Industrial Average fell 0.1% and 0.3%, respectively.
Crude oil prices are trading near a four-month low due to the following:
- rise in US crude oil rigs to an 18-month high
- record US crude oil inventories
- rise in US crude oil production to almost a one-year high
Major oil producers’ meeting
On March 26, 2017, OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC producers expressed willingness to extend major producers’ production cut deal in 2H17. Five OPEC members and Oman expressed interest in extending the deal. Extending the deal is possible after reviewing oil market conditions in April 2017. The deal is expected to remove surplus oil from the oil market. Meanwhile, OPEC’s meeting is scheduled on May 25, 2017.
On March 25, 2017, Russia’s energy minister said that it was too early to comment about extending major producers’ production cut deal. Russia is the largest oil producer in the world. Higher compliance among Russia and OPEC members in the coming months with major producers’ production cut deal could support oil prices.
US crude oil prices and moving averages
Crude oil futures are below their key moving averages as of March 27, 2017. As a result, we could see an extension of bearish momentum. Lower crude oil prices have a negative impact on oil and gas exploration and production companies’ earnings such as Chevron (CVX), Warren Resources (WRES), ExxonMobil (XOM), and QEP Resources (QEP).
What’s in this series?
In this series, we’ll look at the energy calendar, US crude oil’s (XLE) (XOP) (USL) 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.