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Crude Oil Futures: Drivers on June 4–8

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Oct. 17 2019, Updated 9:02 p.m. ET

Energy calendar  

The American Petroleum Institute is scheduled to release its crude oil inventory report on June 5. The U.S. Energy Information Administration is scheduled to release its US crude oil production data on June 6. Baker Hughes, a GE Company (BHGE), is scheduled to release its US oil rig count report on June 8.

All of these events could influence oil prices this week. WTI oil prices fell ~6.9% on May 24–June 1. The prices fell due to bearish factors, which we discussed in Part 1 of this series. The Vanguard Energy ETF (VDE) decreased ~0.1% on May 24–June 1. VDE aims to follow the performance of an index of energy stocks. The Energy Select Sector SPDR ETF (XLE) decreased 0.2% on May 24–June 1. XLE aims to follow the performance of the Energy Select Sector Index.

Concho Resources (CXO), Cimarex Energy (XEC), and Helmerich & Payne (HP) account for ~2.5% of XLE’s holdings. These stocks fell ~9.2%, ~7.2%, and ~7%, respectively, on May 24–June 1. These stocks fell the most among XLE’s holdings during this period.

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Hedge funds 

Hedge funds’ net long positions in WTI crude oil futures and options contracts trading on NYMEX fell 14% to 324,235 on May 22–29—the lowest level since July 2017. The CFTC released the data on June 1.

Crude oil price drivers  

The active WTI crude oil futures contracts closed at $72.24 per barrel on May 21—the highest settlement price since November 2014. Expectations of new sanctions on Iran and Venezuelaongoing supply cutsstrong oil demand, and supply outages have supported oil prices.

However, oil prices have declined 9% since May 21. The prices fell due to the expectation of a rise in the oil production from Russia, Saudi Arabia, and the US. The strong US Dollar Index also pressured oil prices.

Read Decoding US Supplies and the Brent-WTI Spread and Which Factors Are Driving US Natural Gas Futures Higher? for crude oil and natural gas updates.

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