US crude oil last week
Last week, US crude oil June futures rose 1.8% and closed at $62.76 per barrel on May 17—the first weekly gain since April 19. The S&P 500 Index (SPY) fell 0.8% last week. The fall in the broader market might have limited oil’s upside despite rising geopolitical tensions in the Middle East.
Will oil rise continue this week?
At 5:15 AM EST on May 20, US crude oil prices rose 0.4% from the closing level last week. Earlier on May 20, US crude oil prices were 1.7% higher. President Trump warning Iran might have pushed oil higher. Saudi Arabia asked its regional allies for an emergency meeting on May 30 to due to deteriorating conditions in the Middle East.
On May 16, the Brent-WTI spread rose to ~$9.8—the highest level since March 12. Rising geopolitical tensions in the Middle East might be behind the rise in the spread. There are concerns about a supply disruption pushing Brent oil higher than WTI oil.
The spread might favor upstream stocks like ConocoPhillips (COP), which has significant exposure to oil production outside the US. Apart from ConocoPhillips, the widening spread might also benefit US downstream stocks.