12 Jan

Are Supply Concerns Pushing Oil Higher?

WRITTEN BY Rabindra Samanta

US crude oil

On January 11, 2018, US crude oil’s (USO) (USL) February 2018 futures gained 0.4% and settled at $63.80 per barrel, a new three-year high. US crude oil inventory and production data supported oil prices after the data were released on January 10, 2018.

Are Supply Concerns Pushing Oil Higher?

The ongoing economic crisis in Venezuela could decrease the nation’s oil output. On January 5, 2018, Reuters reported that the OPEC (Organization of the Petroleum Exporting Countries) compliance rate for December 2017 could rise because of the fall in Venezuela’s oil output. The current diplomatic tussle between the United States and Iran over the nuclear deal could further increase oil’s supply concerns.

Between January 4 and January 11, 2018, US crude oil futures gained 2.9%. The S&P 500 Index (SPY) (SPX-INDEX) and the Dow Jones Industrial Average Index (DIA-INDEX) rose 1.6% and 2%, respectively, over that period. In the next part, we’ll analyze oil’s contribution to the gains of these equity indexes.

Natural gas

On January 11, 2018, natural gas (UNG) (BOIL) February 2018 futures rose 6.1% and settled at $3.08 per MMBtu (million British thermal units). The EIA (U.S. Energy Information Administration) reported a record fall of 359 Bcf (billion cubic feet) in natural gas inventories for the week ended January 5, 2018. In the week ended December 29, 2017, natural gas inventories were 5.8% below their five-year average. But the fall pushed natural gas inventories further to 6.3 percentage points below the five-year average, a bullish sign for natural gas prices. The spike in natural gas prices on January 11, 2018, pushed its trailing week gains to 7.1%.

Latest articles

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.

14 Jun

IEA Again Slashes Its Oil Demand Growth Estimate

WRITTEN BY Rabindra Samanta

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.