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What’s Impacting S&P the 500 and Crude Oil?

Gordon Kristopher - Author
By

Nov. 20 2020, Updated 1:30 p.m. ET

S&P 500’s performance  

The S&P 500 rose ~1.7% to 2,718.37 during the first half of 2018. Strong first-quarter earnings results and the reduced corporate tax helped the S&P 500 during the first half of the year. However, trade wars and the US interest rate hike limited the upside for the S&P 500 during the same period. The SPDR S&P 500 ETF (SPY) rose ~1.7% to $271.28 during the first half of the year. SPY aims to track the performance of the S&P 500 Index.

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S&P 500’s sector-wise performance 

The consumer discretionary, technology, and energy sectors rose 10.8%, 8.6%, and 5.1%, respectively, during the first half of the year. These sectors supported the S&P 500 the most during this period.

The energy sector accounts for ~6.2% of the S&P 500. The Energy Select Sector SPDR ETF (XLE) rose ~5.1% to $75.94 during the first half of the year. XLE represents the S&P 500 Index’s energy sector.

Commodities 

Active WTI crude oil (USO) futures rose 23% to $74.15 per barrel during the first half of the year. Oil prices were at the highest level since November 2014. The prices rose due to unexpected supply outages in Libya and Canada, major oil producers’ self-imposed supply cuts, lower US and OECD crude oil inventories, and record US crude oil exports. Sanctions on Iran and the continued production decline in Venezuela also supported oil prices. However, record US crude oil production and more production from Saudi Arabia and Russia could limit the upside in oil prices. 

Active US natural gas (UNG) futures fell 1% to $2.92 per MMBtu (million British thermal units) during the first half of the year. Record natural gas production and mild weather pressured natural gas prices. However, strong demand, rising exports, and warmer-than-usual weather could help the prices.

The iShares S&P GSCI Commodity-Indexed Trust (GSG) rose 10% to $17.9 during the first half of the year. GSG aims to follow an index composed of a diversified group of commodity futures.

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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