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What to Expect from Crude Oil Prices

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US crude oil

On December 7, 2017, US crude oil (USO) (USL) January 2018 futures rose 1.3% and closed at $56.69 per barrel. The rise in oil prices came after the news that one of the Nigerian oil unions will go on strike on December 18, 2017. It will impact Nigeria’s oil production.

Earlier in the week, the buildup in motor gasoline inventories had a negative impact on oil prices. Weekly US crude oil production crossed above 9.7 million barrels per day in the week ending December 1, 2017. It’s at record highs, according to weekly data. So, the overall risk to oil prices is increasing.

On November 30–December 7, 2017, US crude oil January 2018 futures fell 1.2%. The fall in oil prices could have a negative impact on equity indexes like the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA).

Natural gas

On December 7, 2017, natural gas (UNG) (BOIL) January 2018 futures fell 5.4% and closed at $2.76 per MMBtu (million British thermal units)—the lowest closing price since October 30, 2017. On the same day, the EIA announced that natural gas inventories unexpectedly and unseasonably rose by 2 Bcf (billion cubic feet). The market expected a fall of 5 Bcf. On November 30–December 7, 2017, natural gas January futures fell 8.7%. Bearish weather forecast data mainly caused the downside in natural gas prices.

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