US Crude Oil Futures near 1-Week High

Market Realist

US crude oil futures 

April WTI crude oil futures contracts rose 2.2% to $62.57 per barrel on March 5, 2018—the highest settlement since February 27, 2018. Brent crude oil futures contracts rose 1.8% to $65.5 per barrel on March 5, 2018.

The Energy Select Sector SPDR ETF (XLE) and the Vanguard Energy ETF (VDE) rose ~1.1% and ~1.3%, respectively, on March 5, 2018. These funds have exposure to upstream energy companies.

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Crude oil and ETFs’ performance 

Crude oil prices rose on March 5, 2018, due to the expectation of a fall in Cushing crude oil inventories, supply outages in Libya, strong demand, and ongoing supply cuts.

However, US crude oil prices declined ~2% on February 26–March 5, 2018. Prices declined due to the larger-than-expected rise in US oil inventories, an unexpected rise in gasoline inventories, and record US oil production.

The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) and the VanEck Vectors Oil Services ETF (OIH) decreased 0.1% and 2.1%, respectively, on February 26–March 5, 2018. XLE and VDE declined 2.2% and 2%, respectively, during the same period. XOP outperformed the other energy ETFs. These ETFs have exposure to oil and gas companies.

Crude oil inventory report  

On March 7, 2018, the EIA will release its crude oil inventory report. Bloomberg estimates that US oil inventories could have increased by 2.5 million barrels on February 23–March 2, 2018. A larger-than-expected increase in US crude oil inventories could pressure oil prices.