26 Jun

OPEC’s Meeting Helped Crude Oil Prices and the S&P 500

WRITTEN BY Gordon Kristopher

S&P 500’s performance 

The S&P 500 rose ~0.2% to 2,754.88 on June 22. A lower-than-expected rise in crude oil production from OPEC supported oil prices, which helped energy stocks and the S&P 500. Eight out of the 11 key sectors in the S&P 500 rose on June 22.

The SPDR S&P 500 ETF (SPY) rose ~0.2% to $274.74 on June 22. SPY aims to track the performance of the S&P 500 Index. However, E-Mini S&P 500 futures fell 0.4% from the previous settlement in early morning trade on June 25.

OPEC’s Meeting Helped Crude Oil Prices and the S&P 500

S&P 500’s sector-wise performance 

The energy, materials, and real estate sectors rose 2%, 1.4%, and 0.9%, respectively, on June 22. These sectors supported the S&P 500 the most.

The energy sector accounts for ~6% of the S&P 500. The Energy Select Sector SPDR ETF (XLE) rose ~2% to $75.2 on June 22. XLE represents the S&P 500 Index’s energy sector.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) rose 2.5% to $17.4 on June 22. GSG aims to follow an index composed of a diversified group of commodity futures.

Crude oil and OPEC’s meeting 

August WTI crude oil futures rose 4.6% to $68.58 per barrel on June 22. Brent oil futures rose 3.4% to $75.55 per barrel on the same day. OPEC held its meeting on June 22. OPEC plans to increase its output by 600,000 barrels per day starting in July, which was much less than the market expectations. OPEC only pledged to bring the supply cut compliance back to 100% from higher levels due to unintended production drops from member countries.

The United States Oil ETF (USO) follows active WTI oil futures’ performance. USO rose ~5.3% to $14.02 on June 22. August WTI oil futures contracts fell 0.2% from the previous settlement in early morning trade on June 25.

US natural gas

July US natural gas futures fell 1% to $2.95 per MMBtu (million British thermal units) on June 22. A rise in natural gas production pressured natural gas prices. The United States Natural Gas ETF (UNG) follows active natural gas futures. UNG fell 1% to $23.87 on June 22. July US natural gas futures contracts fell 0.9% from the previous settlement in early morning trade on June 25.

Series overview  

In this series, we’ll discuss the US crude oil rig count and hedge funds’ net long positions in WTI crude oil. We’ll also discuss the US natural gas rig count and hedge funds’ net long positions in US natural gas.

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