Crude oil fell last week
On June 16–23, 2017, US crude oil (USO) (DBO) August futures fell 4.4%. US crude oil prices have closed in the red in each of the last five weeks—the longest losing streak since the week ending July 28, 2015.
On June 23, 2017, US crude oil August futures closed at $43.01 per barrel. US crude oil active futures reclaimed $43 after two successive settlements below the $43 level. In the previous week, Libya’s oil production and rising US crude oil supplies had a negative impact on oil prices. During this period, the market ignored the fall in crude oil and gasoline inventories above market expectations for the week ending June 16, 2017.
In the week ending June 23, 2017, the US oil rig count rose by 11 to 758. US crude oil futures have already entered a bear market. If the oil rig count rises, it could put more pressure on oil prices.
Natural gas futures
Last week, technical buying could have supported natural gas prices despite bearish inventory data. In the week ending June 23, 2017, natural gas rigs fell by three to 183. During the same week, the oil rig count rose. A higher-than-average inventory addition rate due to subdued consumption and rising natural gas supplies could be a concern for natural gas bulls.
In the week ending June 23, 2017, the Dow Jones Industrial Average (DIA) was almost flat, but the S&P 500 Index (SPY) rose 0.2%. These two equity indexes outperformed crude oil last week. However, the downturn in their energy constituents would have limited the upside in these equity indexes.
Below are the price performances of major energy sub-sector ETFs on June 16–23, 2017:
- The Alerian MLP ETF (AMLP) at -0.9%
- The Energy Select Sector SPDR ETF (XLE) at -2.9%
- The VanEck Vectors Oil Services ETF (OIH) at-4.7%
- The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) at -2.0%
In the same week, XLE fell the most among sector-based SPDR ETFs. The Health Care Select Sector SPDR ETF (XLV) rose 3.6% and outdid all of the other sector-based SPDR ETFs. The possible withdrawal of Obamacare boosted healthcare stocks.
Energy stocks on June 19–23, 2017
Now, we’ll analyze the price performance of energy stocks on June 16–23, 2017. These energy stocks are part of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), the Energy Select Sector SPDR ETF (XLE), the VanEck Vectors Oil Services ETF (OIH), and the Alerian MLP ETF (AMLP). A few US-listed but foreign-based integrated energy stocks are also part of the list.
McDermott International (MDR) rose 13.5%—the most in the energy sector on June 16–23, 2017. Last week, Gulfport Energy (GPOR) was the second-highest gainer in the energy sector. On June 21, 2017, the company reported production-related data for its SCOOP wells. Two of its SCOOP wells, Vinson 2-22X27H and Vinson 3R-22X27H, produced 15.7 MMcfe (million cubic feet) per day and 18.7 MMcfe per day of dry natural gas based on peak production data in the last 30 days. On June 22, 2017, Gulfport Energy stock rose 4.6%.
Rice Midstream Partners (RMP) fell the most among energy stocks on June 16–23, 2017.
Oilfield services and equipment stocks such as Seadrill Limited (SDRL), Oceaneering International (OII), and Tidewater (TDW) were the third, fourth, and fifth-largest losers among energy stocks. Notably, the VanEck Vectors Oil Services ETF (OIH) was the largest loser among the energy sub-sector ETFs.
Key events in the energy sector
The following chart shows key events in the energy sector on June 26–30, 2017.
For more key updates, please visit Market Realist’s Energy and Power page.