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Crude Oil Futures Fell before the US Oil Inventories Report

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Crude oil futures  

US crude oil futures contracts for May delivery fell 0.4% to $62.13 per barrel on March 19, 2018. Brent oil futures fell 0.2% to $66.05 per barrel on March 19, 2018.

The United States Oil ETF (USO) and the United States Brent Oil ETF (BNO) track US and Brent oil futures, respectively. USO was flat at 12.5 on March 19, 2018, while BNO rose 0.1% to 18.1 on the same day.

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Crude oil and ETFs’ performance 

Crude oil futures dropped on March 19, 2018, due to the expectation of an increase in US oil production. The expectation of a rise in US crude oil inventories also weighed on oil prices. Cushing inventories could have risen on March 9–16, 2018, according to Bloomberg surveys, which also weighed on oil prices.

However, WTI oil prices increased ~1.1% on March 12–19, 2018. Prices increased due to the drop in US gasoline and distillate inventories. Strong oil demand and ongoing supply cuts also supported oil prices.

The ProShares Ultra Bloomberg Crude Oil ETF (UCO) increased 2.8% on March 12–19, 2018. UCO targets to provide twice the daily return of an index of WTI crude futures contracts. The PowerShares DB Oil Fund (DBO) rose 0.66% on March 12–19, 2018. DBO follows the performance of the DBIQ Optimum Yield Crude Oil Index Excess Return. USO and BNO increased 1.4% and 1.7%, respectively, on March 12–19, 2018. UCO outperformed other crude oil ETFs during the same period. 

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Crude oil price drivers  

The EIA will release its weekly crude oil production and inventory data on March 21, 2018. A rise in US crude oil production could pressure oil prices in upcoming sessions. A larger-than-expected rise in the US oil inventory could also pressure oil prices.

Series overview 

In this series, we’ll discuss Iran’s crude oil production, the global oil supply outage, and OECD’s oil inventories. We’ll also discuss some crude oil price forecasts.

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