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Brent and US Crude Oil Futures Rose More than 3% in 1 Day

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Updated

US crude oil futures  

September WTI (West Texas Intermediate) crude oil (IXC) (FENY) (IEO) futures contracts rose 3% to $48.51 per barrel on August 18, 2017. Brent crude oil futures also rose 3.3% to $52.72 per barrel on August 18, 2017.

Crude oil futures rose due to:

  • ExxonMobil’s (XOM) crude oil refinery unit at Baytown, Texas, shut down on August 18, 2017. It produces 560,500 bpd (barrel per day) of refined products. The refinery shutdown supported crude oil and gasoline prices.
  • The US dollar (UUP) is near a 13-month low.
  • US crude oil inventories fell 13% from the peak in March 2016.
  • There’s a possible supply disruption in Nigeria and Libya.
  • There’s an expectation of slowing US crude oil rigs. US crude oil rigs fell by five to 763 last week
  • There’s an expectation of higher compliance for OPEC’s output cut deal.
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Nigeria’s crude oil exports could fall

Nigeria’s crude oil production was at 1.66 MMbpd (million barrels per day) in July 2017—the highest level in the last 17 months. Nigeria’s crude oil exports are expected to hit 1.88 MMbpd in September 2017. The country’s crude oil exports are expected to fall to 1.72 MMbpd in October 2017. The expectation of a fall in Nigeria’s crude oil exports and production also supported the crude oil process on August 21, 2017.

Crude oil futures and energy ETFs 

WTI crude futures fell for the third straight week. Crude oil future have fallen 14.8% YTD (year-to-date). The top five energy equity ETFs’ YTD returns ranked by assets under management are mentioned below:

  • The Energy Select Sector SPDR Fund (XLE) has fallen 16.2% YTD.
  • The Vanguard Energy ETF (VDE) has fallen 18.1% YTD.
  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has fallen 28.5% YTD.
  • The iShares U.S. Energy ETF (IYE) has fallen 17.3% YTD.
  • The VanEck Vectors Oil Services ETF (OIH) has fallen 34% YTD.
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Broader market 

The S&P 500 (SPY) (SPX-INDEX) fell 0.1% to 2,425.55 on August 18, 2017. Likewise, the Dow Jones (DJI) and NASDAQ fell on the same day. So far, the S&P 500 has risen 8.34% in 2017. Bullish momentum in SPY could support oil and gas demand and prices.

What’s in this series?  

In this series, we’ll look at the US refinery outage, the US dollar, crude oil highs and lows in the last 18 months, Cushing crude oil inventories, and the US crude oil rig count.

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