US crude oil
Between June 15 and June 22, US crude oil August futures rose 5.8%. The gains mainly came in the latter part of the week after the OPEC meeting on June 22 helped US crude oil prices surge. On June 22, US crude oil August futures rose 4.6% and settled at $68.58 per barrel. That same day, US crude oil August futures were 3.4% and 0.6% above their 20-day and 50-day moving averages, respectively, for the first time in nearly a month.
However, this week, US crude oil futures might consolidate near their 20-day and 50-day moving averages at $66.34 and $68.15, respectively. Initially, prices reacted positively to OPEC’s decision to raise output by ~600,000 barrels per day compared to market expectations for a higher rise. The announced rise will be just enough to bring the adherence back to 100% from the much higher levels lately due to unplanned constraints in some OPEC member countries.
However, the IEA’s (International Energy Agency) Oil Market Report released on June 13 expects a slowdown in oil demand growth in the second half of 2018. So the rise in OPEC’s output in addition to higher US crude oil exports could keep a lid on oil prices.
Any possible weakness in oil prices could worry investors in oil-weighted stocks, including Denbury Resources (DNR), Whiting Petroleum (WLL), and Oasis Petroleum (OAS). These stocks rose 23.6%, 18.6%, and 14.7%, respectively, last week.
Between June 15 and June 22, natural gas August futures fell 2.3% and settled at $2.95 per million British thermal unit on June 22. However, hot weather forecasts could push natural gas prices higher this week. That would add a further upside to natural gas–weighted stocks such as Chesapeake Energy (CHK) and Gulfport Energy (GPOR), which rose 8.8% and 8.6%, respectively, last week and avoided natural gas’s fall.