uploads/2017/11/Oil-and-inventory-1.png

WTI Crude Oil Futures Hit a High Last Seen in June 2015

By

Updated

US and Brent crude oil futures

January WTI (West Texas Intermediate) crude oil futures rose 2.1% to $58.02 per barrel on November 22, 2017, the highest level seen since June 2015. Brent oil (BNO) futures rose 1.2% to $63.32 per barrel.

Oil prices rose due to a drop in US crude oil inventories, a weak US dollar (UUP), and crude oil supply disruption. The Keystone Pipeline transports 590,000 bpd (barrels per day) of crude oil from Canada to the United States. It was shut down due to a leak last week, and restarting the pipeline may take several weeks.

Brent and WTI crude oil performance

Brent and WTI oil prices have risen more than 30% since the lows seen in June 2017. Ongoing production cutslower global and US crude oil inventories, a fall in Venezuela’s oil production, and geopolitical tensions have supported oil prices.

Impact on ETFs and energy stocks

Higher oil prices benefit ETFs and oil producers. The ProShares Ultra Bloomberg Crude Oil ETF (UCO) and the United States Oil ETF (USO) have risen 64.8% and 29.6% respectively, since June 2017. Energy producers and drillers Bill Barrett (BBG), W&T Offshore (WTI), and Diamond Offshore (DO) have risen 72%, 50%, and 31%, respectively.

Wall Street 

The Dow Jones Industrial Average (DIA) and the S&P 500 (SPY) fell 0.3% and 0.1%, respectively, on November 22, 2017. The financial and real estate sectors dragged down SPY on November 22, 2017. The NASDAQ (QQQ) rose 0.07% to 6,867.36 on November 22, 2017. 

Series focus 

This series covers US crude oil, gasoline, and distillate inventories, refinery demand, and production. Next, we’ll analyze how the upcoming OPEC (Organization of the Petroleum Exporting Countries) meeting could drive oil prices.

More From Market Realist