Crude oil futures
January US crude oil (UWT) (DBO) futures contracts fell 0.3% and were trading at $57.22 per barrel at 1:23 AM EST on December 11, 2017. Prices fell due to the rise in US crude oil rigs to the highest level since September 2017. Volatility in oil prices impacts ETFs like the Energy Select Sector SPDR ETF (XLE) and the Vanguard Energy ETF (VDE). These ETFs rose 0.9% and 1.3%, respectively, on December 8, 2017.
Meanwhile, the E-Mini S&P 500 (SPY) futures contracts for December delivery rose 0.08% to 2,653.25 at 1:23 AM EST on December 11, 2017.
China’s crude oil imports
China’s crude oil imports rose by ~1,710,000 bpd (barrels per day) or 24% to ~9,010,000 bpd in November 2017—compared to the previous month, according to China’s General Administration of Customs. It supported oil (UCO) (USO) prices on December 8, 2017. Meanwhile, imports hit a record 9,210,000 bpd in March 2017.
China’s imports rose 12% in the first 11 months of 2017—compared to 2016. Imports rose due to increased imports from teapot refiners and filling up strategic crude oil reserves. Any rise in imports from China is bullish for oil prices. High oil prices benefit oil producers (IEZ) (PXI) like BP (BP), Noble Energy (NBL), PDC Energy (PDCE), and Stone Energy (SGY).
Jefferies expects that China will contribute 10% or 150,000 bpd of the global crude oil demand growth in 2018. High Chinese crude oil imports would support crude oil (BNO) (DWT) prices.
Next, we’ll discuss how the Fed could impact the dollar and oil prices.