Crude prices mostly fell, but some good news at Cushing helped
WTI prices see a glimmer of hope at Cushing (Part 8 of 11)
Oil price movement
Crude prices continued to fall as global supply concerns lingered. According to Goldman Sachs, prices needed to fall further before production could curb to balance the market (see Part 11 of this series).
WTI fell ~0.3% to settle at $49.59 while Brent fell ~4.9% to settle at $59.4 on Monday 2 March.
In positive news, Tuesday brought an increase in oil prices, owing to supply risks in Libya as a result of an attack on the country’s biggest port. The discord between the US and Israel concerning nuclear talks with Iran also boosted prices. WTI rallied ~2% to settle at $50.52. Meanwhile, Brent increased ~2.5% to settle at $61.02 on Tuesday.
On Wednesday, although the overall inventory report was bearish, the fact that US stocks at its biggest hub, Cushing, had slowed down, bought a glimmer of hope to oil prices. WTI increased ~2% to $51.43, Brent, however, decreased 0.7% to $60.55 on Wednesday.
Both grades of crude declined on Thursday, following a strong dollar, as US-Iran nuclear deal talks dragged on. WTI declined ~1.5% to settle at $50.76, Brent fell 0.1% to settle at $60.48 on Thursday.
Crude prices fell further on Friday, following a disappointing drilling activity report. The decline in the number of rigs was smaller compared to the prior weak’s decline. WTI decreased 2.2% to settle at $49.61 on Friday. Meanwhile, Brent decreased 1.2% to settle at $59.73.
Lower prices hurt the margin of companies like Pioneer Resources (PXD), Chevron (CVX), ExxonMobil (XOM), and ConocoPhillips (COP). All these companies are components of the Energy Select Sector SPDR ETF (XLE). They make up ~36% of the ETF.
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