The Price of WTI Oil Hits $70 per Barrel: Are the Bulls Back?


Nov. 20 2020, Updated 12:20 p.m. ET

API’s crude oil inventories 

On June 26, the API (American Petroleum Institute) released its weekly crude oil inventory report following the crude oil futures settlement for that day in the NYMEX (New York Mercantile Exchange). It reported that US crude oil inventories fell 9.2 MMbbls (million barrels) to 421.4 MMbbls from June 15–22. A Reuters survey estimates that US oil inventories may have declined 2.6 MMbbls during the same period. Genscape estimates that Cushing crude oil inventories may have declined even more, by 2.2 MMbbls from June 15–22. The EIA (U.S. Energy Information Administration) will release its oil inventory report on June 27.


Article continues below advertisement

Drivers of crude oil futures 

August WTI crude oil prices hit $70.53 per barrel on June 26. It’s the highest settlement since May 24. The Trump administration has pushed its allies to stop importing oil from Iran by November 4, which could curb supplies in the global oil market. The news supported oil prices. Supply outages in Libya and Canada also helped oil prices rise on June 26.

However, a strong US Dollar Index and expectations of a rise in US crude oil production, followed by the rise in OPEC crude oil production, could pressure oil prices. According to ClipperData, Saudi Arabia is expected to pump up to 11 million bpd (barrels per day) of crude oil in July, from 10.8 million bpd in June. It would be the highest level in history if those projections are achieved.

WTI crude oil prices rose ~3.6% on June 26. The Energy Select Sector SPDR ETF (XLE) rose ~1.3% that same day. The companies in XLE produce crude oil and natural gas and provide other energy-related services and equipment.

Concho Resources (CXO), Cimarex Energy (XEC), EOG Resources (EOG), and Apache (APA) rose 5.1%, 3.6%, 2.4%, and 2.4%, respectively, on June 26. These stocks were the biggest percentage gainers in XLE’s holdings that day. They account for 8% of XLE’s holdings.

EIA’s inventory data 

A larger-than-expected decline in US oil inventories reported by the EIA on June 27 could support oil prices. However, a surprise build in inventories could weigh on oil prices.

Next, let’s take a look at gasoline and distillate inventories.


More From Market Realist

  • 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.