Why Oil Traders Should Stay Cautious after OPEC Meeting
On November 30, 2017, US crude oil (USO) (USL) active futures rose just 0.2% and closed at $57.4 per barrel.
Nov. 20 2020, Updated 3:18 p.m. ET
US crude oil
On November 30, 2017, US crude oil (USO) (USL) active futures rose just 0.2% and closed at $57.4 per barrel. On November 30, 2017, OPEC and Russia decided to extend the production cut up to December 2018. However, the extra nine-month extension was not able to push oil prices higher. OPEC members and Russia will meet in June 2018 to review the impact of production cuts on oil prices.
Will oil fall further?
Between November 22 and November 30, 2017, US crude oil futures fell 1.1%. Over this time period, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 1.9% and 3.2%, respectively. The relationship between oil and equity indexes will be discussed in the next part.
In the last three trading sessions, the $58 level has become a strong resistance for US crude oil prices. In part five of this series, we’ll discuss US crude oil futures’ key price level for the next week.
US crude oil production was 9.7 million barrels per day in the week ended November 24, 2017. For the same week, US crude oil exports were ~1.4 million barrels per day. US crude oil production at its peak and relatively high exports could be a worry for oil prices.
Natural gas
On November 30, 2017, natural gas (UNG) (BOIL) active futures fell 4.8% and closed at $3.03 per MMBtu (million British thermal units). On the same day, the EIA (Energy Information Administration) reported a fall of 33 Bcf (billion cubic feet) in natural gas inventories against the market’s expected fall of 37 Bcf, which could have caused the fall in natural gas prices. Between November 22 and November 30, 2017, natural gas active futures fell 1.1%.