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.
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%.
Between November 22 and November 30, energy subsector ETFs had relatively low correlations with oil prices.
Broadcom (AVGO) stock fell ~8.5% after markets closed yesterday following the semiconductor giant's fiscal 2019 second-quarter earnings release. It missed analysts' revenue estimate and cut its fiscal 2019 revenue guidance by $2 billion to $22.5 billion due to sluggishness in its semiconductor solutions business.
The SPDR Gold Shares ETF (GLD), which tracks physical gold prices, has underperformed the broader markets year-to-date, rising just 4.4% compared to the S&P 500’s (SPY) gain of 15.9% as of June 14. The sentiment for gold, however, has been turning around.
Safe havens such as Treasuries and gold were back in favor on June 14 as stocks fell due to rising tensions in the Middle East, concerns over growth, and the looming threat of the US-China trade war. The tech-heavy Nasdaq Composite Index fell 0.67% in the first hour of trading.
Lululemon (LULU) stock rose 2.1% on June 13 in reaction to better-than-expected first-quarter results and an upgraded outlook for fiscal 2019 overall. The company's first-quarter adjusted EPS grew 34.5% to $0.74 on revenue growth of 20.4% to $782.32 million. Analysts had expected EPS of $0.70 and revenue of $755.31 million. Here's why the outlook got an upgrade.
As of 4:40 AM Eastern Time today, US crude oil active futures were at $51.83, ~4% below their closing level in the previous week. If US crude oil prices stay at those levels today, they'll mark their third week of decline in five weeks.
Amazon is discontinuing its Amazon Restaurants service, which has been delivering food for restaurants in parts of the United States. Amazon Restaurants launched in the United States in 2015 and entered the British market the following year. However, it met strong opposition in the British market.