US crude oil
On February 25, US crude oil prices fell 3.1% from the highest closing level for active US crude oil futures since November 12 and settled at $56.45 per barrel. The fall in oil prices was likely due to President Trump’s tweet expressing his dislike regarding the recent rise in oil prices.
Will oil overcome President Trump’s dislike?
On February 25, US crude oil active futures fell 2.7% below their 100-day moving average. On February 22, US crude oil active futures moved above this key moving average for the first time since October 17. The optimism surrounding trade talks will be critical for oil prices to regain their highest level in 2019. President Trump’s tweet might not have a long-term impact.
This week, the EIA’s (U.S. Energy Information Administration) oil inventory data will likely be neutral for oil prices, which we’ll discuss in Part 3. If US crude oil production shows any sign of slowing down, US crude oil could easily move above the 100-day moving average. Next, we’ll discuss US crude oil production.
The S&P 500 Index (SPY), the Dow Jones Industrial Average (DIA), and the S&P Mid-Cap 400 (IVOO) might be impacted by any short-term changes 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 changes in oil prices. In Part 5, we’ll discuss how a higher Brent-WTI spread impacts these energy stocks.