uploads///oil pump jacks energy industry rig

What Dented Oil Prices?


Apr. 3 2018, Updated 11:04 a.m. ET

US crude oil

On April 2, 2018, US crude oil May futures fell 3% and closed at $63.01 per barrel. On the same day, oil-weighted stocks California Resources (CRC), Denbury Resources (DNR), and Whiting Petroleum (WLL) fell 6.2%, 6.9%, and 3.3%, respectively. Energy ETFs that hold energy stocks like the SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the Energy Select Sector SPDR ETF (XLE) fell 3.4% and 2% on April 2, 2018.

Article continues below advertisement

Bearish factors for oil prices

On April 2, 2018, the S&P 500 Index fell 2.2%, which might be a bearish factor for oil prices. Usually, sentiments in oil and equity markets are interrelated. On April 1, 2018, China announced new tariffs for US products like meat, fruit, and other products. The new tariffs renewed global trade war concerns.

In March 2018, Russia’s oil output rose to 10.97 MMbpd (million barrels per day)—an 11-month high. Russia’s output was ~23,000 barrels per day more than the promised output ceiling under the production cut—another concern for oil bulls.

On April 1, 2018, Iraq’s cabinet decided to add 1.5 MMbpd to its existing capacity by 2022—a factor that could have a negative impact on oil prices in the long term. In January 2018, Iraq’s oil capacity was close to 5 MMbpd.

Other important factors

In this series, we’ll discuss other key factors for US crude oil prices like US crude oil production, inventory levels, and US crude oil exports.

Moving averages

On April 2, 2018, US crude oil active futures were 0.2%, 0.1%, 3.7%, and 15.3% above their 20, 50, 100, and 200-day moving averages, respectively. If US crude oil active futures break below the shorter-term moving averages, then prices might witness additional short-term weakness.


More From Market Realist

  • People at a gas station
    Energy & Utilities
    Best Gas Stocks to Buy After the Colonial Pipeline Attack
  • Recon Africa employees
    Energy & Utilities
    Is Recon Africa a Multi Bagger Stock You Should Buy?
  • Dr. Donald Sadoway (second from left) pictured with Paula S. Aspell, David Pogue, and Chris Schmidt
    Energy & Utilities
    Ambri Expands in the Liquid Metal Battery Space, Still Privately Held
  • Valero gas station
    Energy & Utilities
    Valero Energy’s Prospects in 2021, Rebound in Energy and Gas
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.