Crude oil prices
July WTI (West Texas Intermediate) crude oil (USO) (UCO) (IEZ) futures contracts rose 0.9% and closed at $51.13 per barrel on May 22, 2017. June WTI crude oil futures contracts rose 0.8% and closed at $50.73 per barrel on the same day. The June contract expired on May 22, 2017. The S&P 500 (SPY) (SPX-INDEX) rose 0.5% to 2,394 on May 22, 2017.
US crude oil prices hit a fresh one-month high on May 22, 2017, ahead of OPEC’s meeting on May 25, 2017. Prices rose due to the expectation of an extension of the production cut deal for nine more months in OPEC’s meeting. Read Will Trump and US Supplies Drive Crude Oil Futures? for more on bullish drivers.
US crude oil futures are above their 20-day and 50-day moving averages of $48.6 and $50 per barrel as of May 22, 2017. Bullish momentum could breach key resistance of $53 per barrel after OPEC’s meeting.
On May 15, 2017, Saudi Arabia and Russia favored extending the production cut deal for nine more months. Meanwhile, Saudi Arabia’s energy minister visited Iraq on May 22, 2017. He tried to convince Iraq to support the production cut deal. Iraq, OPEC’s second-largest producer, said that it would support the production cut deal for nine more months. Previously, it stated that it would support the deal for six more months. Changes in crude oil production impact crude oil (SCO) (BNO) (XES) prices.
Bearish drivers in 2017
Crude oil prices are down 10.31% YTD (year-to-date) due to the rise in US crude oil rigs to the level in April 2015, high US crude oil inventories, and high US crude oil production. Lower crude oil prices have a negative impact on oil producers such as PDC Energy (PDCE), Cobalt International Energy (CIE), and Continental Resources (CLR).
What’s in this series?
In this series, we’ll focus on some bullish and bearish drivers of oil prices. Let’s start by looking at crude oil prices during early morning trade on May 23, 2017.
Goldman Sachs (GS) thinks that a rise in production from OPEC, Russia, and the US in 2H18 could lead to renewed oversupply by the end of 2018.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.