Crude oil prices
WTI (West Texas Intermediate) crude oil (USL) (SCO) (IEZ) futures contracts for May delivery rose 0.6% to $53.7 per barrel in electronic trade at 5:20 AM EST on April 12, 2017. Prices rose due to the API’s (American Petroleum Institute) bullish crude oil inventory report.
Prices are trading near a six-week high. Likewise, broader markets like the S&P 500 (SPY) (SPX-INDEX), NASDAQ, and Dow Jones are near all-time highs. Bullish momentum in the US stock market could support oil demand and oil prices. The US is the largest crude oil consumer. For more on crude oil prices, read Part 1 of this series.
US crude oil futures have fallen ~5% year-to-date due to the following factors:
- US crude oil inventories are at an all-time high—read Part 3 to learn more
- US crude oil production at January 2016 high
- near-record OECD crude oil inventoriesglobal oil inventories
- expectation of a rise in crude oil production from Iran
- US crude oil rig count hit a 19-month high
- expectation of a strong US dollar (UUP) in 2017
- Cushing crude oil inventories are at an all-time high
All of these bearish drivers could pressure crude oil prices. However, the bullish drivers discussed in Part 1 of this series pushed crude oil prices above their key moving averages. US crude oil prices are above their 20-day, 50-day, 100-day, and 200-day moving averages of $50.3, $51.2, $52.1, and $49.8 per barrel as of April 12, 2017. It suggests more bullish momentum for oil prices. Prices could even breach key resistances of $54 and $55 per barrel in the short term if US crude oil inventories and OECD crude oil inventoriesglobal oil inventories start falling.
Higher crude oil (FENY) (USO) (UCO) (XLE) prices have a positive impact on oil and gas exploration and production companies like Noble Energy (NBL), Cobalt International Energy (CIE), and Denbury Resources (DNR).
Next, we’ll look at the API’s estimates for US crude oil inventories.