On November 27, 2017, the US Commodity Futures Trading Commission released its weekly “Commitment of Traders” report. Hedge funds cut their net bullish positions on US crude oil (USL) (UCO) futures and options by 5,872 contracts or 1.7% to 343,840 contracts on November 14–24, 2017. US crude prices rose 5.5% during the same period. Hedge funds’ are reducing their net bullish positions in US crude oil (UWT) (DBO) futures and options ahead of OPEC’s meeting. It signals that hedge funds are becoming cautious before OPEC’s meeting. For more updates on OPEC’s meeting, read the previous part of the series.
Crude oil inventories
Bloomberg estimates that the crude inventories in Cushing, Oklahoma, would have fallen by 2 MMbbls (million barrels) on November 17–24, 2017. Wall Street analysts expect that US crude oil inventories would have fallen by 3.15 MMbbls during the same period. Any fall in Cushing and US crude oil inventories is bullish for crude oil prices. It benefits oil producers (IEO) (IXC) like Goodrich Petroleum (GDP), Carrizo Oil & Gas (CRZO), and Devon Energy (DVN).
Crude oil price forecasts
Market intelligence company FGE forecast that Brent crude oil (BNO) prices could trade between $65 and $70 per barrel in 2018 if the current production cuts are extended for nine more months. According to the EIA, US and Brent crude oil prices could average $51.04 per barrel and $55.61 per barrel in 2018.
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The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
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Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
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