WTI crude oil futures
January WTI (West Texas Intermediate) crude oil (DBO) (DWT) futures contracts fell 1.4% to $58.11 per barrel on November 27, 2017. WTI oil prices tested a 30-month high on November 24, 2017. Brent oil (BNO) futures contracts fell 0.03% to $63.84 per barrel on November 27, 2017. Prices fell due to uncertainty about whether or not OPEC will extend production cuts beyond March 2018. US crude oil rigs rose to nearly an eight-week high, which also weighed on oil (UWT) (DWT) prices.
Restarting the Keystone pipeline
On November 16, 2017, the Keystone pipeline was closed due to a leak in South Dakota. The pipeline transports 590,000 bpd (barrels per day) of crude oil from Canada to the US. It was expected to be offline for several weeks. As a result, it supported oil (USL) (SCO) prices last week. However, TransCanada stated that the pipeline will operate starting on November 28, 2017. The restart might pressure oil prices. Lower oil prices impact energy producers (RYE) (XOP) like Carrizo Oil & Gas (CRZO), SM Energy (SM), and Chevron (CVX). These stocks fell 8.7%, 7.3%, and 0.8%, respectively, on November 27, 2017.
Wall Street’s performance
The Dow Jones Industrial Average Index (DIA) rose 0.1% to 23,580.78 on November 27, 2017. The S&P 500 (SPY) and NASDAQ (QQQ) fell 0.04% and 0.15%, respectively, on November 27, 2017. The fall in energy stocks (XLE) (VDE) dragged SPY. The energy sector (PXI) fell 1% yesterday. However, these three indices are trading close to their record levels.
Strong 3Q17 earnings results and prospects about the US tax bill’s success drove SPY in the past few months.
In this series, we’ll discuss Russia’s oil production plans, Libya’s crude oil production, OPEC’s production cut duration, and some crude oil price forecasts.