US crude oil
On February 11, US crude oil prices fell 0.6% and settled at $52.41 per barrel. On the same day, US crude oil active futures made an intraday low of $51.23—the lowest level since January 17. A rise of 0.4% in the US dollar could be a reason for the fall in oil prices. A stronger dollar has a negative impact on oil demand. At 7:09 AM EST on February 12, US crude oil prices were at $53.38 per barrel. Any fall in the EIA’s inventory data might contract the difference between oil inventories and their five-year average, which we’ll discuss in Part 3 of this series.
The S&P 500 Index (SPY), the Dow Jones Industrial Average (DIA), and the S&P Mid-Cap 400 (IVOO) might gain from any short-term rise in oil prices due to their exposure to the energy sector. Upstream energy stocks like ConocoPhillips (COP), Chesapeake Energy (CHK), and Occidental Petroleum (OXY) will likely be impacted by any rise in oil prices.
However, if oil prices retreat, it could be a good opportunity for bulls. In the first six months of 2019, US crude oil production growth might decelerate, which might have a positive impact on oil prices.
Important price points
At 7:09 AM EST on February 12, US crude oil futures were trading 8.4% and 16.1% below their 100-day and 200-day moving averages, respectively. At the same time, US crude oil prices were 0.6% and 5.1% above their 20-day and 50-day moving averages, respectively—an important support zone for oil prices. US crude oil’s price crossing above the 20-day moving average indicates short-term momentum in oil. On the upside, $54.76 could be an important level for crude oil until February 15.