Crude oil futures
January US crude oil (USL) (DWT) futures contracts rose 0.5% to $57.3 per barrel on December 15, 2017. The crude oil supply outage in Britain helped oil prices. The United States Oil Fund (USO) fell 0.3% to 11.46 on December 15, 2017. It’s the largest US crude oil futures tracking ETF.
IEA’s monthly report
US crude oil (DTO) (OIL) prices fell ~2.8% from their 30-month high. Record US production has been limiting the upside for oil prices. US crude oil production is close to major producers like Russia and Saudi Arabia.
The IEA (International Energy Agency) released its monthly oil market report on December 14, 2017. It estimated that a rise in US crude oil production would partially offset ongoing production cuts. It expects that US crude oil production will rise by 870,000 bpd (barrels per day) in 2018, which was 10% higher than its November estimates. It also expects global supplies to rise by 1,100,000 bpd in 2018, which would cause a surplus in the oil market and pressure oil prices.
Wall Street’s performance
Similarly, the S&P 500 (SPY) (SPX-INDEX) rose 0.9% to 2,675.81 on December 15, 2017. All three indices closed at record highs. Renewed optimism due to the likelihood of a successful US tax cut boosted the US stock market. The bill is expected to reduce US corporate tax from 35% to 21%.
In this series, we’ll discuss the US dollar, Cushing inventories, US oil rigs, and key drivers for oil prices this week.