27 Dec

Will US Crude Oil Inventories Drive Oil Prices to $62 per Barrel?

WRITTEN BY Gordon Kristopher FEATURED IN Commodities

US crude oil futures  

February US crude oil (UCO) (USL) futures contracts fell 0.4% and were trading at $59.7 per barrel at 12:55 AM EST on December 27, 2017. Prices fell due to profit-booking. Meanwhile, March E- Mini S&P 500 (SPY) futures contracts rose 0.07% to 2,688.75 at the same time.

US oil prices were at the highest level since June 2015. Higher oil (DBO) prices favor energy producers’ (XES) (VDE) earnings like Hess (HES), Bill Barrett (BBG), and Bonanza Creek Energy (BCEI).

Will US Crude Oil Inventories Drive Oil Prices to $62 per Barrel?

EIA’s crude oil inventories  

For the week ending December 15, 2017, US crude oil inventories fell for the fifth straight week. So far, nationwide inventories have fallen 9.8% in 2017. During the same period, US oil prices have risen ~10%. Any fall in inventories is bullish for oil (DWT) (UCO) prices.

The EIA is scheduled to release the US crude oil inventory report on December 28, 2017. The market survey estimates that US crude oil inventories would have fallen by ~3.9 MMbbls (million barrels) on December 15–22, 2017.

A larger-than-expected fall in US crude oil inventories could benefit oil prices. It could drive oil prices to $61 per barrel or $62 per barrel. Higher oil (DWT) prices support funds like the Vanguard Energy ETF (VDE) and the iShares U.S. Energy ETF (IYE).

However, traders should be cautious. Any large build in gasoline inventories on December 15–22, 2017, could pressure oil prices. Analysts expect a build of 0.9 MMbbls during this period.

Next, we’ll discuss US crude oil refinery demand and imports.

Latest articles

18 Mar

Tilray Reports Its Fourth-Quarter Earnings


Tilray (TLRY) reported its quarterly earnings after the market closed. The company reported a total quarterly sales of $15.5, which increased nearly 203.8% year-over-year.

Earlier today, US tech giant Apple (AAPL) launched new versions of its iPad Air and iPad Mini. The company is set to hold a special event on March 25.

18 Mar

How Facebook Aims to Compete with Twitch


Facebook has stated that over 700 million of its users play games, watch gaming videos, and engage in gaming groups on its platform.

On March 18, President Trump tweeted, “GDP growth during the four quarters of 2018 was the fastest since 2005.” Let’s look at the data.

Today, Steel Dynamics released its first-quarter earnings guidance. It expects its first-quarter EPS to be between $0.88 and $0.92.

18 Mar

Why Amazon Is Interested in YES Network


Amazon (AMZN) recently teamed up with the Yankees and other investors to purchase the YES Network.