Are Oil Bulls Back?

On April 12–18, US crude oil June futures rose 0.1% and closed at $64 per barrel. The S&P 500 Index (SPY) fell 0.1% last week.

Rabindra Samanta - Author

Apr. 22 2019, Published 8:29 a.m. ET

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US crude oil last week

On April 12–18, US crude oil June futures rose 0.1% and closed at $64 per barrel. Profit-booking and concerns surrounding possible production cut extensions into the second half of the year dominated oil prices last week.

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The S&P 500 Index (SPY) fell 0.1% last week—a bearish factor for oil prices. The oil rig count fell by eight to 825 last week—a bullish factor for oil prices this week.

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Are oil bulls back?

At 3:51 AM EST on April 22, US crude oil prices have risen by $1.61 from the closing level last week. Oil prices are at the highest level since October 31. The US might end waivers for countries importing oil from Iran this week, which boosted oil prices. The US allowed eight countries to continue importing oil from Iran after the US reinstated sanctions on Iran on November 5. Japan, India, South Korea, and China accounted for 24% of the global oil consumption and 61% of Iran’s crude oil and condensate exports in 2015, according to data from the U.S. Energy Information Administration.

As a result, ~1 million barrels of oil per day might be endangered from global oil supplies. With the ongoing conflict in Libya, the oil market might tighten more and bring oil bulls back. The above analysis could be important for upstream stocks like ConocoPhillips (COP), Hess (HES), Chesapeake Energy (CHK), and others.


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