What Could Drive Crude Oil Futures and Wall Street Next Week?

Crude oil futures 

US crude oil (USL) (DBO) futures contracts for February delivery fell 0.03% to $63.95 per barrel on January 18, 2018. Brent oil (BNO) futures fell 0.1% to $69.31 per barrel on the same day. Prices are near three-year highs. It benefits the ProShares Ultra Bloomberg Crude Oil (UCO), which fell 0.4% to 26.3 on January 18, 2018.

What Could Drive Crude Oil Futures and Wall Street Next Week?

EIA and OPEC’s report 

A recovery in US crude oil production and a rise in gasoline inventories pressured oil (DWT) prices on January 18, 2018. The EIA released the data yesterday. OPEC’s crude oil production increased by 43,000 bpd (barrels per day) to 32,416,000 bpd in December 2017—compared to the previous month. It also pressured oil (BNO) prices on January 18, 2018. OPEC published its monthly oil market report on the same day. For more details on the report, read Part 3 of the series.

Oil producers’ meeting

Major oil producers’ meeting will be held on January 21, 2018, in Oman. The meeting will review the ongoing production cuts. Countries like the United Arab Emirates, Iraq, and Kuwait insist on sticking to the current production cut plans despite the surge in oil prices. Expectations of higher compliance with the production cuts and a fall in US crude oil inventories could support oil prices next week. Higher oil (DWT) prices benefit energy companies (RYE) (XLE) like SN Energy (SN), Southwestern Energy (SWN), Schlumberger (SLB), and Laredo Petroleum (LPI).

Wall Street 

The Dow Jones Industrial Average Index (DIA), the NASDAQ (QQQ), and the S&P 500 (SPY) fell 0.37%, 0.16%, and 0.03%, respectively, on January 18, 2018. All three of the indexes closed at record levels on January 17, 2018.

The S&P 500 increased 1.8% in the last five sessions. The healthcare (XLV), consumer discretionary (XLY), and IT (XLK) sectors have risen more than 2% in the last five sessions. These sectors could drive SPY in the coming weeks too.

Series overview 

In this series, we’ll discuss some of the bearish and bullish drivers for crude oil prices.