This series analyzes crude oil prices and fundamentals. For an in-depth fundamental look at crude oil and related companies, sectors, and drivers, please refer to our Energy and Power page.
NYMEX-traded July WTI (West Texas Intermediate) crude oil futures gained marginally by 0.31% and were trading at $59.88 per barrel on May 25, 2015 in the electronic trading. WTI oil prices rose on the sentiments of the strong demand consensus. ETFs like the United States Oil Fund LP (USO) and the ProShares Ultra DJ-UBS Crude Oil (UCO) generally follow the price trajectory of WTI crude oil.
Crude oil prices surged on Monday—supported by rising demand from Asia and the US. Japan’s Finance Ministry reported that crude oil imports from Japan increased by 9.1% in April 2015 to 3.62 MMbpd (million barrels per day) from last year—despite rising crude oil prices. The Chinese counterpart imported 7.4 MMbpd in April 2015—supported by growing car sales, despite a slowing economy.
The US Dollar Index appreciated against the major global currencies on yesterday’s trade. The appreciating dollar had less of an impact on dollar denominated commodity crude oil. The rise in the dollar means that crude oil will be expensive. The US Dollar Index was trading at 96.38 against the major currencies in yesterday’s trade.
The EIA (U.S. Energy Information Administration) published a weekly crude report on May 20, 2015. The government data showed that weekly oil inventories increased by 2.67 MMbbls (million barrels) for the week ending May 15. The next EIA report is scheduled to release on Thursday, May 28, 2015.
This is the fifth time that oil prices increased in the last ten days. Crude oil prices increased by 0.40% more on the average up days than on the average down days, over the last ten trading sessions. WTI performed fairly well in yesterday’s trade. Prices increased by 10.71% YTD (year-to-date)—led by improving demand from China, Japan, and the US.
WTI crude oil price fluctuations impact oil and gas exploration companies like Murphy Oil (MUR), Hess (HES), and Newfield Exploration (NFX). They account for 2.22% of the Energy Select Sector SPDR ETF (XLE). These stocks have a crude oil production mix that’s more than 40% of their total production.
