The API (American Petroleum Institute) is set to release its weekly crude oil inventory report on May 30, and the EIA (U.S. Energy Information Administration) is set to release its US crude oil production data on May 31. Baker Hughes, a GE company (BHGE), is scheduled to release its US oil rig count report on June 1.
All of these events could impact oil prices this week. Last week, WTI oil prices fell ~4.8% due to bearish factors, which we covered in the first part of this series. Also, the Vanguard Energy ETF (VDE) fell ~4.7%, and the Energy Select Sector SPDR ETF (XLE) fell 4.5%.
Apache (APA), Concho Resources (CXO), and Pioneer Natural Resources (PXD), which account for ~5% of XLE, fell ~10.5%, ~9.1%, and ~9.1%, respectively, last week. These stocks fell the most among XLE’s holdings.
Hedge funds’ net long positions in WTI crude oil futures and options contracts trading on the NYMEX (New York Mercantile Exchange) and the ICE (Intercontinental Exchange) rose by 2,009 to 421,916 between May 15 and 22.
Crude oil price drivers
WTI crude oil futures contracts settled at $72.24 per barrel on May 21—the highest settlement price since November 2014. New sanctions on Iran and Venezuela, ongoing supply cuts, strong oil demand, OECD[1.Organisation for Economic Cooperation and Development] oil inventory decline, and supply outages have supported oil prices and could continue to do so this week.
However, record US crude oil production and supply cut expectations could pressure oil prices. For crude oil and natural gas updates, read Decoding Factors Limit the Upside for Crude Oil Prices and Which Factors Are Driving US Natural Gas Futures Higher?