Crude oil prices
June WTI (West Texas Intermediate) crude oil (XLE) (USO) (XOP) futures contracts rose 0.7% and closed at $49.33 per barrel on April 28, 2017. The S&P 500 (SPY) (SPX-INDEX) fell 0.2% on April 28, 2017.
Iran and major oil producers’ deal
On April 29, 2017, Iran’s Oil Minister Bijan Zanganeh said that the country would be interested in joining major producers’ production cut deal if it’s extended in 2H17. Any cap on Iran’s crude oil production would support crude oil prices.
Saudi Arabia, OPEC’s (Organization of the Petroleum Exporting Countries) kingpin, expects global oil demand to rise in 2H17. OPEC also expects that global oil inventories will decrease in the coming months.
All of these factors could rebalance the oil market by the end of 2017. A Reuters poll suggests that an extension of major producers’ production cut deal in 2H17 could drain global oil inventories by the end of 2017. OPEC’s meeting is scheduled on May 25, 2017. It would drive oil prices this month.
US crude oil prices fell 2.5% in April 2017. They’re near a one-month low due to:
- a rise in US crude oil production to August 2015 high
- a surprise build in US gasoline inventories for two consecutive weeks
- a rise in US crude oil rigs to a two-year high
Volatility in crude oil prices impacts oil and gas exploration and production companies’ earnings such as ExxonMobil (XOM), Chevron (CVX), Sanchez Energy (SN), and Goodrich Petroleum (GDP).
What’s in this series?
In this series, we’ll look at the energy calendar, US crude oil’s (VDE) (RYE) (IEZ) 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.