Crude oil futures
April US crude oil futures contracts fell 2.2% to $61.64 per barrel on February 28, 2018—the lowest settlement since February 15, 2018. Brent oil futures fell 1.2% to $65.78 per barrel on February 28, 2018—the lowest settlement since February 21, 2018.
The United States Oil ETF (USO) and the United States Brent Oil ETF (BNO) follow WTI and Brent crude oil futures, respectively. USO fell ~2.2% to 12.3 on February 28, 2018, while BNO fell 2.7% to 17.7 on the same day.
Drivers for crude oil futures
Crude oil prices declined on February 28, 2018, due to the larger-than-expected increase in US crude oil inventories, an unexpected rise in gasoline inventories, and record US crude oil production.
The appreciating dollar also pressured oil prices on February 28, 2018. The US Dollar Index appreciated 0.3% to 90.6 on February 28, 2018. The US Dollar Index is near a two-month high. The Power Shares DB US Dollar Bullish ETF (UUP) rose 0.3% to 23.6 on February 28, 2018. UUP follows the US dollar’s performance, which is also near a two-month high.
The factors mentioned above could pressure oil prices in upcoming sessions too. US crude oil prices declined 0.1% on February 21–28, 2018. The ProShares Ultra Bloomberg Crude Oil ETF (UCO) increased 1.1% on February 21–28, 2018, while the PowerShares DB Oil Fund (DBO) fell 0.2% during the same period. These funds follow crude oil futures. The above chart shows that UCO outperformed other crude oil ETFs on February 21–28, 2018. UCO provides twice the daily return of an index of WTI crude futures contracts.
In this series, we’ll discuss US crude oil inventories and production and US gasoline and distillate inventories.