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Will Seasonality Factors Affect Crude Oil Futures?

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Crude oil futures  

September US crude oil (USO) (IEZ) (XES) futures contracts fell 2.4% to $47.37 per barrel on August 21, 2017. September US crude oil futures contracts will expire on August 22, 2017. The most active October US crude oil futures contracts fell 2.3% to $47.53 per barrel on the same day. Brent crude oil futures contracts fell 2% to $51.66 per barrel on August 21, 2017.

Prices fell due to the following factors:

  • an expected fall in gasoline and crude oil demand in the coming weeks
  • the end of the peak summer driving period
  • profit-taking
  • the rise of US crude oil production to 9.5 million barrels per day for the week ending August 11, 2017
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Crude oil futures and energy ETFs  

US crude futures have fallen 16.5% YTD (year-to-date) due to bearish drivers. 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 17.6% YTD.
  • The Vanguard Energy ETF (VDE) has fallen 19.7% YTD.
  • The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) has fallen 29.7% YTD.
  • The iShares U.S. Energy ETF (IYE) has fallen 18.7% YTD.
  • The VanEck Vectors Oil Services ETF (OIH) has fallen 44% YTD.

US gasoline and diesel futures 

US gasoline (UGA) futures fell 2.5% to $1.58 per gallon on August 21, 2017. Likewise, US diesel futures fell 3% to $1.57 per gallon on the same day. The US gasoline and diesel futures fell due to the expectation of slowing demand due to the summer driving period approaching an end. The fall in US gasoline and diesel futures pressured crude oil prices on August 21, 2017.

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S&P 500 and energy sector 

The S&P 500 (SPY) (SPX-INDEX) has risen 8.5% YTD (year-to-date). The S&P 500 energy sector has fallen 13.2% YTD. The energy sector has been dragging down the S&P 500 in 2017. 

US crude oil inventory report

The American Petroleum Institute will release its weekly crude oil inventory report on August 22, 2017.

Series overview

In this series, we’ll look at Saudi Arabia’s crude oil production and exports, Iran’s crude oil production, and hedge funds’ positions on US crude oil futures and options.

In the next part, we’ll look at how OPEC’s crude oil production in August could drive oil prices.

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