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US Crude Oil Futures near 3-Week High before Inventory Report


Nov. 20 2020, Updated 5:10 p.m. ET

US crude oil futures   

April WTI crude oil futures contracts rose 0.6% and settled at $63.91 per barrel on February 26, 2018. Brent crude oil futures contracts rose 0.3% and closed at $67.5 per barrel on the same day. Both of the benchmarks had the highest settlement since February 5, 2018. Prices rose due to the unexpected supply outage in Libya, bullish comments from Saudi Arabia, and ongoing supply cuts.

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Crude oil and ETFs’ performance   

On February 24, 2018, Saudi Arabia’s oil minister, Khalid Al-Falih, said that the country would have a higher compliance with ongoing supply cuts. He also added that crude oil exports from Saudi Arabia would be averaging less than 7 MMbpd (million barrels per day) in February 2018 and March 2018. His positive comments supported oil prices on February 26, 2018. The improving oil demand in Europe due to cold weather has been driving oil prices higher.

Brent and WTI crude oil prices rose ~4.1% and 3.6% on February 16–26, 2018. Prices rose due to the unexpected drop in US oil inventories, bullish comments from Saudi Arabia, supply cuts, and strong demand.

The United States Oil ETF (USO), the ProShares Ultra Bloomberg Crude Oil ETF (UCO), and the PowerShares DB Oil Fund (DBO) increased 3.9%, 8.7%, and 4.8%, respectively, on February 16–26, 2018. The iPath S&P GSCI Crude Oil Index ETN (OIL) also increased 5.3% during this period. These ETFs follow crude oil futures.

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Crude oil inventory report 

On February 28, 2017, the EIA will release its crude oil inventory report. Reuters estimates that US crude oil inventories could have increased by 2.7 million barrels on February 16–23, 2018. US gasoline and distillate inventories are expected to decline by 600,000 barrels and 700,000 barrels, respectively, during this period. 

Series overview   

In this series, we’ll discuss the supply outage in Libya, the US dollar, Cushing inventories, US oil rigs, and some drivers for oil prices this week.


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