14 Sep

Oil Traders Might Avoid Short Positions

WRITTEN BY Robert Scott FEATURED IN Commodities

US crude oil prices

On September 13, US crude oil October futures fell 2.5% and settled at $68.59 per barrel. On the same day, the Energy Select Sector SPDR ETF (XLE) was unchanged. The S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 0.5% and 0.6% on September 13. Mute energy stocks might have helped these indexes to rise. In Part 3 of this series, we’ll analyze US crude oil’s relationship with these equity indexes.

Oil Traders Might Avoid Short Positions

Oil traders might avoid short positions

Concerns surrounding the trade war’s impact on global economic growth and weaker emerging market currencies might curb the demand for oil—a bearish factor for oil prices. So far in 2018, the WisdomTree Emerging Currency Strategy Fund (CEW) has fallen 7.6%.

According to IEA data, the oil market was at a surplus of 0.27 MMbpd (million barrels per day) in the second quarter. The IEA estimates demand growth of 1.4 MMbpd and 1.5 MMbpd in 2018 and 2019, respectively. Based on Bloomberg data, Iran’s oil exports have fallen to 1.3 MMbpd in September compared to over 2 MMbpd last month. OPEC might struggle to bring 100% of its spare production capacity online. In the United States, crude oil production has plateaued in the range of 10.8 MMbpd–11 MMbpd since June. Besides these important points, any supply disruption due to Hurricane Florence could push oil higher.

These factors might increase the risk for short positions in the oil market. In part four of this series, we’ll discuss important price limits for US crude oil.

Natural gas

On September 13, natural gas October futures fell 0.4% to $2.817 per MMBtu (million British thermal units). On the same day, the EIA reported that natural gas inventories rose by 69 Bcf (billion cubic feet) last week. A Reuters poll suggested that inventories might rise by 68 Bcf for the same week. Natural gas prices and the United States Natural Gas ETF (UNG) rose 1.6% and 1.1%, respectively, in the trailing week.

Latest articles

Monster Beverage (MNST) stock was down 1.6% as of 2:47 PM EDT on March 20.

Earlier today, the second-largest US automaker by 2018 sales volume, Ford Motor Company (F), revealed its plan to invest $850 million in its Flat Rock assembly plant through 2023.

Mizuho downgraded Yum! Brands (YUM) from “neutral” to “underperform” while keeping its 12-month price unchanged at $84, which represents a fall of 15.4% from its March 19 closing price of $99.20.

20 Mar

Why Verizon Sought to Lead 5G Rollout

WRITTEN BY Rachel Gunter

According to Verizon, its mobile 5G plans will cost $10 more than its current 4G plans.

As of March 19, Dunkin’ Brands (DNKN) was trading at $71.55, which represents a rise of 3.9% since the announcement of its fourth-quarter earnings on February 7.

Suncor Energy's shareholder returns have grown consistently over the past few years. The company hasn't forgotten its commitment to growth.