Crude oil in resistance zone
In the week ending December 29, 2017, crude oil (USO) prices rose sharply from $58.47 per barrel to $60.42 per barrel, an increase of more than 3%. Crude oil prices increased strongly on Tuesday and Friday last week. Currently, crude oil prices are trading above their 200-week moving average, which is a very positive sign. Crude oil’s 200-week moving average acts as an important support and resistance, as it helps to identify the multiyear trend in crude oil prices. However, crude oil needs multiple attempts to cross above or below its 200-week moving average. Also, as of December 29, crude oil prices are trading not too far from their 2015 high of $62.58, which might also act as a resistance for crude oil prices.
Natural gas (UNG) prices were up sharply last week. Natural gas prices increased from $2.66 per MMBtu (million British thermal units) to $2.95 per MMBtu.
ConocoPhillips stock reversal
Despite strong gains in crude oil prices, last week ConocoPhillips’s (COP) stock price decreased by ~1.1% or from $55.50 to $54.9. After rising by more than a percentage point on Tuesday, COP traded with a negative bias for the rest of the week. As the week came to a close, COP generated a classic reversal candle on its weekly chart, which might indicate that COP’s uptrend might slow down or take a breather.
Due to rising crude oil prices last week, the Energy Select Sector SPDR ETF (XLE) produced a positive performance of ~0.4%. XLE outperformed the SPDR S&P 500 ETF (SPY) last week, which decreased by ~0.2%. Some of COP’s peers that also reversed their intra-week gains last week included Devon Energy (DVN) and Marathon Oil (MRO). DVN decreased by ~0.4%, whereas MRO increased by ~0.2% last week.
In the next part, we will look at COP’s correlation coefficient with crude oil prices.