Today at around 10:56 AM EDT, US crude oil May futures were $0.16 higher than their last closing price.
Today, US crude oil active futures made an intraday high of $64.61, the fifth-highest level for US crude oil since November 2018.
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China’s data pushed oil higher
On April 17, China reported its GDP figure for the first quarter of 2019. Its GDP grew 6.4% on a YoY (year-over-year) basis, beating Reuters’ estimate of 6.3%. China is the second-largest consumer of oil after the United States based on the EIA’s (U.S. Energy Information Administration) data for 2016. Therefore, oil reacted positively to the GDP data release.
Going forward, OPEC and its allies’ decision whether or not to extend production cuts into the second half of 2019 will be key for oil’s price performance. Last week, Russia hinted that it might not opt for another round of production cuts amid rising US oil exports. Saudi Arabia also hasn’t made its stance clear. If Saudi Arabia doesn’t bolster market confidence for a second round of production cuts, oil’s gains could evaporate.
Energy stocks and the broader market
Any changes in oil prices will affect US equity indexes such as the S&P 500 Index (SPY), the Dow Jones Industrial Average (DIA), and the S&P 400 MidCap Index (IVOO) because of their energy exposure. Upstream energy stocks such as Chesapeake Energy (CHK) and Carrizo Oil & Gas (CRZO) are also affected by oil prices.