Crude oil futures
Brent (BNO) oil futures rose 0.3% to $68.07 per barrel on January 4, 2018. US crude oil (USO) futures contracts for February delivery also rose 0.6% to $62.01 per barrel on January 4, 2018. It’s the highest settlement since December 2014. US crude oil (UWT) prices are at a three-year high, which favors the ProShares Ultra Bloomberg Crude Oil (UCO). UCO rose 0.5% to 24.7 on January 4, 2018.
Drivers for crude oil futures
A massive draw in US crude oil inventories supported oil (USL) prices on January 4, 2018. The EIA released the data on the same day.
Iran is OPEC’s third-largest crude oil producer. Public protests against the Iranian government continued for the seventh day on January 4, 2018. Geopolitical tension might cause supply disruptions, which supported oil prices on January 4, 2018.
The extension of ongoing production cuts, strong demand, and the supply outage in Britain and Libya boosted Brent (BNO) oil prices more than 10% from the lows in December 2017. Higher oil (SCO) prices favor oil companies (XOP) (IEZ) like Contango Oil & Gas (MCF) and Transocean (RIG). These stocks rose more than 5% on January 4, 2018.
The NASDAQ (QQQ) rose 0.18% to 7,077.9 on January 4, 2018. The Dow Jones Industrial Average Index (DIA) rose 0.61% to 25,075.1, while the S&P 500 (SPY) rose 0.4% to 2,723.99 on January 4, 2018. All three of the indexes hit a record on January 4, 2018. The US stock market extended its rally due to strong global economic growth data.
The S&P 500 (SPY) rose ~1.5% in the last five trading days. The energy (VDE), materials (XLB), and IT (VGT) sectors supported SPY the most during this period. The utilities (XLU) (VPU) and real estate (VNQ) (IYR) sectors dragged SPY the most during this period.
In this series
In this series, we’ll discuss some bullish and bearish drivers of crude oil prices.
According to the EIA, US crude oil production increased by 28,000 bpd (barrels per day) to 9,782,000 bpd on December 22–29, 2017.
Hibbett Sports (HIBB) stock surged 22.3% as of 1:54 PM ET today as the company reported impressive results for fiscal 2019's fourth quarter, which ended on February 2.
Wall Street analysts expect a potential upside of 21.63% for Alexion Pharmaceuticals based on the stock's closing price on March 21.
Today, we got another round of dismal data points from Europe (VGK)(EZU). According to a Markit survey, Germany’s (EWG) March PMI Composite Output Index fell to a 69-month low of 51.5.
On March 21, US crude oil’s implied volatility was 24.9%, which was 6.7% below its 15-day average. Usually, lower implied volatility supports oil prices.
The overall cannabis sector took a hit today amid the broader market's declines. The volatility index (VIX) jumped 17.9%, and the cannabis sector is more sensitive than the market.
The tech-heavy NASDAQ Composite Index (QQQ) is on track to post its 12th weekly gain in 13 weeks.