US crude oil prices
July US crude oil (XOP) (USO) (UCO) futures contracts rose 0.6% and closed at $44.7 per barrel on June 16, 2017. Brent crude oil futures rose 1% and settled at $47.37 per barrel on the same day. Prices rose due to the following:
- There’s short covering—crude oil prices are trading close to levels in November 2016.
- A weak dollar (UUP) supported crude oil prices on June 16, 2017.
- Bullish momentum in the S&P 500 (SPY) (SPX-INDEX) also supported crude oil prices. The S&P 500 hit an intraday high of 2,445.7 on June 9, 2017—the highest level ever.
- There has been a fall in crude oil exports by major producers, like Saudi Arabia, to Asia and the US.
Crude oil prices last week
Global benchmark, Brent crude oil prices fell ~1.6% last week. Likewise, US crude oil (XLE) (RYE) prices fell ~2.6% last week. US crude oil prices have fallen 20.4% YTD (year-to-date). Lower oil prices have a negative impact on oil producers’ earnings like Chesapeake Energy (CHK), SM Energy (SM), and Sanchez Energy (SN). These stocks have fallen 27.4%, 54.8%, and 16.8%, respectively, YTD.
Will crude oil prices continue to recover?
US crude oil rigs rose by six last week. The expectation of a rise in US crude oil production due to the rise in drilling activity will likely pressure oil prices this week. To learn more, read Traders Track the Key Support Level for Crude Oil Futures.
Next, we look at the US dollar and its impact on oil prices this week.