US crude oil futures
US crude (UWT) (SCO) oil futures contracts for January delivery rose 1.1% to $57.99 per barrel on December 11, 2017. Brent oil (BNO) futures rose 2.03% to $64.69 per barrel on the same day—the highest level since June 2015. Prices rose due to the crude oil supply outage in Britain. The possible strike in Nigeria also helped crude oil prices.
Crude oil supply outage in Britain
The Forties Pipeline is the largest crude oil pipeline in Britain. It transports 450,000 bpd (barrels per day) of crude from the North Sea to the Kinneil terminal in Scotland. The pipeline is expected to be shut down for several weeks due to repair work. It boosted Brent oil (BNO) (DWT) prices on December 11, 2017.
Extending production cuts until December 2018 and several bullish drivers have pushed oil prices to nearly a three-year high. Higher oil prices benefit the Energy Select Sector SPDR ETF (XLE). It rose 0.77% to 69.81 on December 11, 2017. Oil majors like ExxonMobil (XOM) and Chevron (CVX) account for ~40 of XLE’s holdings.
Wall Street’s performance
The Dow Jones Industrial Average Index (DIA) rose 0.23% to 24,386.03, while the NASDAQ (QQQ) rose 0.5% to 6,875.08 on December 11, 2017. The S&P 500 (SPY) rose 0.3% to 2,659.9 on the same day. Wall Street rose due to bullish momentum in the telecommunication (IYZ) (VOX), IT (XLK) (VGT), and energy (VDE) (XOP) sectors on December 11, 2017. Nine out of the 11 major sectors in SPY rose on the same day.
In this series, we’ll discuss the FOMC meeting, US crude oil inventories and production, Iraq’s oil production and exports, and some crude oil price forecasts.