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US Crude Oil Futures and Wall Street Are under Pressure

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Crude oil futures  

The WTI (West Texas Intermediate) crude oil (DBO) (OIL) (DTO) futures contracts for December delivery fell 0.5% and closed at $52.18 per barrel on October 25, 2017. The prices fell due to the surprise build in US crude oil inventories last week. The EIA (U.S. Energy Information Administration) published the data yesterday. Even US crude oil production rebounded last week, which pressured oil (USL) (SCO) (USO) prices.

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Brent (BNO) crude oil futures rose 0.19% to $58.44 per barrel on October 25, 2017. The prices rose due to the expectation of an extension of ongoing production cuts and geopolitical tension in Iraq. On October 25, 2017, Kurdish officials said that they would freeze the independence referendum results. However, Iraq seems to be aggressive about regaining Kurdistan.

Wall Street  

The NASDAQ (QQQ) fell 0.5% to 6,563.89 on October 25, 2017. It hit a record of 6,629.1 on October 20, 2017. The Dow Jones Industrial Average Index (DIA) fell 0.5% to 23,329.46 on October 25, 2017. It hit record of 23,475 on October 24, 2017. The S&P 500 (SPY) fell 0.47% to 2,557.15 on October 25, 2017. It hit record of 2,575.2 on October 20. All three of the indices are near record levels due to the strong third quarter earnings results and hopes that President Trump’s tax cut plans might be successful. So far, 97 S&P 500 companies have announced their 3Q17 earnings results. Around 73.2% of the companies had better-than-expected earnings results, according to Reuters. Around 72% of the companies had better-than-expected earnings results in the last four quarters, according to Reuters.

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The telecommunication (VOX) (IYZ), industrials (XLI) (ITA), and energy (XLE) (VDE) sectors fell 2.3%, 1%, and 0.7%, respectively, on October 25, 2017. They pressured SPY on October 25. The telecommunication and energy sectors have fallen 16% and 10% YTD (year-to-date). So far, these sectors have been dragging SPY in 2017. However, the IT (XLK) (VGT) and healthcare (XLV) sectors have risen 30% and 21% YTD. These sectors have been driving SPY in 2017.

EIA’s crude oil inventory report 

The EIA published its crude oil inventory report on October 25, 2017. In this series, we’ll focus on US crude oil inventories, production, refinery demand, and gasoline and distillate inventories.

In the next part, we’ll start with Saudi Arabia and Russia’s impact on the oil market.

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