Crude oil movement in 2017
Crude oil prices improved in 2017. The WTI (West Texas Intermediate) crude oil active futures contracts remained within the range of $54–$44 in 1H17. However, it rose 31.2% in 2H17 and 14.2% in 2017.
Crude oil’s (USO) (UCO) movement is mainly supported by various fundamental factors. The fall in US crude oil inventories in various months and the continuation of production cut decisions from OPEC (Organization of Petroleum Exporting Countries) and Russia mainly drove crude oil prices in 2017. Previously, we discussed that despite the rise in crude oil prices, the US energy sector had a poor performance in 2017.
Improvement in demand
Improved economic growth in major emerging economies (EEM) like India (INDA) and China (FXI) (YINN) and in major developed economies like the United Kingdom (EWU), the US (SPY), and Europe (VGK) is mainly driving investors’ sentiment. The improved economic growth is also improving the demand for crude oil in the economy. Higher demand is mainly boosting oil prices.
Crude oil might continue its upward direction in 2018. The continuation of fundamental factors is necessary for this movement. If OPEC and Russia continue the production cut decision, then we might see higher crude oil prices.
In the next part of this series, we’ll analyze how the industrial sector performed in 2017.
Herbalife (HLF) stock soared 40.7% in 2017, riding a boost from the increase in stake by activist investor Carl Icahn in the first quarter.
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.