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OPEC and Strong Dollar Weigh on Crude Oil Futures

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US crude oil futures  

January US crude oil (USL) (UWT) futures contracts fell 0.51% to $56.42 per barrel on November 20, 2017. Brent oil futures (BNO) contracts fell 0.8% to $62.22 per barrel on the same day. Prices fell due to the strong US dollar (UUP) and rising doubts about whether OPEC will prolong ongoing production cuts. US crude oil prices have fallen 2.3% since prices hit a 30-month high on November 6, 2017.

The United States Oil ETF (USO) and the ProShares Ultra Bloomberg Crude Oil ETF (UCO) follow crude oil futures contracts. These ETFs have fallen 1.9% and 4.2%, respectively, since November 6, 2017.

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US dollar 

The US Dollar Index rose 0.45% to 93.99 on November 20, 2017. The US dollar is near a one-week high. Germany isn’t able to form a coalition government. Germany is Europe’s biggest economy. Political uncertainty in Europe supported the US dollar. The strong dollar usually pressures crude oil prices.

OPEC’s meeting

Oil (DBO) (SCO) prices are weak ahead of OPEC’s meeting. Crude oil prices fell last week partially due to doubts about whether Russia will support prolonging the production cuts. The renewed pessimism is weighing on oil prices. Volatility in oil prices could impact oil producers (XLE) (VDE) like Devon Energy (DVN), Noble Energy (NBL), and EOG Resources (EOG).

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Wall Street’s performance 

The Dow Jones Industrial Average Index (DIA), the S&P 500 (SPY), and the NASDAQ (QQQ) rose 0.3%, 0.13%, and 0.12%, respectively, on November 20, 2017. These three indices peaked on November 8, 2017.

The telecommunication (IYZ) (VOX), financials (XLF) (VFH), and industrials (XLI) (ITA) sectors rose 0.96%, 0.5%, and 0.4%, respectively, on November 20, 2017. It supported SPY on November 20, 2017.

Series overview  

In this series, we’ll discuss crude oil production in Iraq, US crude oil inventories and production, Saudi Arabia’s crude oil production and exports, and some crude oil price forecasts.

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