Will Saudi Arabia and Iraq Help Crude Oil Prices?

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.

Will Saudi Arabia and Iraq Help Crude Oil Prices?

OPEC’s meeting 

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.