Crude oil prices 

June WTI (West Texas Intermediate) crude oil (RYE) (IXC) (IYE) futures contracts rose 0.67% and settled at $49.56 per barrel on April 25, 2017. The S&P 500 (SPY) (SPX-INDEX) rose 0.6% on April 25, 2017. Oil and gas are major parts of the energy sector. The energy sector contributed to ~6.6% of the S&P 500 as of April 21, 2017.

US crude oil prices rose from a four-week low due to the expectation of a fall in US crude oil, gasoline, and distillate inventories.

Will Russia Join the Production Cut Deal Extension in 2H17?

Russia and major oil producers’ deal 

OPEC’s next meeting will be on May 25, 2017. The meeting will be the driving force for oil in the next two months. However, Russia hasn’t shown interest in extending major producers’ production cut deal in 2H17.

Russia supported major producers’ production cut deal in 1H17. Russia’s crude oil production usually falls in the first half of the year. It usually ramps up its production in the second half of the year.

Meanwhile, OPEC leaders signaled the extension of major producers’ production cut deal in 2H17. If Russia opts out of the deal in 2H17, we could see a delay in rebalancing the crude oil market. A delay could pressure oil (XLE) (XOP) (USO) prices.

Lower crude oil prices impact oil and gas exploration and production companies’ earnings such as Carrizo Oil & Gas (CRZO), PDC Energy (PDCE), Chesapeake Energy (CHK), and Continental Resources (CLR).

Market focuses on US crude oil inventories  

The U.S. Energy Information Administration will release its weekly crude oil inventory report on April 26, 2017, at 10:30 AM EST. We’ll look at the API’s estimates for US crude oil and gasoline inventories in Part 3 and Part 4 of this series.

In this series, we’ll also discuss US gasoline demand. Let’s start with US crude oil prices in early morning trade on April 26, 2017.

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