On January 8, 2018, the February 2018 futures contract settled at a $3.1 premium to February 2019 futures. On December 29, 2017, this difference or the “futures spread” was at a premium of $3.02. Between December 29, 2017, and January 8, 2018, US crude oil active futures rose 2.2%.
Oil prices could rise with any expansion in the premium, like in the trailing week. However, any contraction in the premium could damage oil’s gains.
The spread at a discount or an expansion of the discount could cause oil prices to fall. A discount reached $2.60 on June 21, 2017. US crude oil active futures fell to the lowest level in 2017. Any contraction in the discount could be good for oil’s recovery.
Between December 29, 2017, and January 8, 2018, the premium and the oil prices rose. The market expects a tightening supply-demand balance for oil in 2018. Higher oil prices could boost the energy constituents of the S&P 500 (SPY) and the Dow Jones Industrial Average (DIA).
On January 8, 2018, US crude oil futures contracts between March 2018 and February 2019 were priced progressively lower. In fact, the United States 12 Month Oil ETF (USL), the United States Oil ETF (USO), and the ProShares Ultra Bloomberg Crude Oil ETF (UCO), which invest in US crude oil futures, might also benefit from this price pattern.
Herbalife (HLF) is scheduled to report its 4Q17 results on February 22, 2018. During the quarter, its volume points have remained weak across key geographies, falling 1.8%.
Most analysts reduced their target prices on FedEx after the delivery giant trimmed its fiscal 2019 earnings outlook.
US new vehicle sales stood at 1.26 million units in February 2019, down about 2.8% from 1.30 million units in February 2018.
On March 15–22, US crude oil May futures rose 0.4% and closed at $59.04 per barrel.
Micron has given a weaker-than-expected revenue forecast for the third quarter but expects memory chip demand to recover in the fourth quarter.
Signet Jewelers (SIG) is expected to report weak fourth-quarter results on April 3.
The EIA is scheduled to release its oil and natural gas inventory data on March 27–28, which could be a short-term driver for oil and natural gas prices.