Crude oil prices
WTI (West Texas Intermediate) crude oil (UCO) (PXI) (VDE) futures contracts for June delivery rose 0.5% and closed at $46.43 per barrel on May 8, 2017. The S&P 500 (SPY) (SPX-INDEX) was almost flat at 2,399.4 on May 8, 2017.
Prices rose due to optimism that major producers’ production cut deal could be extended into early 2018, which could remove the oil market’s surplus.
Saudi Arabia and Russia
On May 8, 2017, Saudi Arabia’s energy minister said that OPEC (Organization of the Petroleum Exporting Countries) would work towards rebalancing the oil market to support oil prices. He added that the production cut deal could be extended into early 2018 as stated above. Russia’s energy ministry said that it would support extending the production cut deal beyond 2017. The OPEC meeting is scheduled in Vienna on May 25, 2017, to discuss the possibility of extending the production cut deal in 2H17.
However, crude oil prices are near a five-month low due to near record US crude oil inventories and the rise in US crude oil production. Meanwhile, Libya has been ramping up production. Consequently, oil prices are down ~18% year-to-date (or YTD). Lower crude oil (RYE) (IEZ) prices have a negative impact on oil and gas exploration and production companies’ earnings such as Chevron (CVX), Denbury Resources (DNR), and Cobalt International Energy (CIE).
What’s in this series?
In this series, we’ll look at the energy calendar, US crude oil’s highs and lows in the last 15 months, Cushing crude oil inventories, the US crude oil rig count, and some crude oil price forecasts.
In the next part, we’ll look at the US dollar and how it impacts crude oil prices.