Weekly Energy Update: June 5 to June 9, 2017 PART 1 OF 7
Crude oil ended in the red last week
On June 9, 2017, US crude oil (USO) (USL) July futures settled at $45.83 per barrel, falling 3.8% in the week between June 2–June 9, 2017. On June 9, Brent crude oil (BNO) active futures closed at $48.15 per barrel, down 3.6% for the week.
On June 7, US crude oil active futures lost 5.1% due to an unexpected rise in US crude oil and gasoline inventories. On June 9, 2017, during intraday trade, US crude oil active futures touched a low of $45.27 per barrel, the third-lowest price level in 2017.
Other factors like a possible slowdown in demand of independent oil refineries in China could be important for crude oil prices.
Natural gas futures near $3
On June 9, 2017, US natural gas (UNG) (BOIL) July futures closed at $3.04 per million British thermal units. Last week, US natural gas July futures rose 1.3%. Most of the gains could be attributed to technical buying as natural gas prices are near the psychological level of $3.
Mild weather and a rise in inventories above market expectation could worry natural gas bulls. Moreover, the EIA’s STEO (Short-Term Energy Outlook) data suggests an increase in natural gas production in 2017 and 2018.
In the week ended June 9, 2017, the natural gas rig count rose by three rigs and closed at 185. Notably, the rise in the oil rig count could also impact natural gas prices adversely.
Major equity indexes and energy commodities
Between June 2–June 9, 2017, the S&P 500 Index (SPY) fell 0.3%, while the Dow Jones Industrial Average Index (DIA) rose 0.3%. Equity indexes have some weight in the energy sector, which could be impacted by movement in energy commodities.
Below are the performances of energy subsector ETFs between June 2–June 9, 2017.
- The Alerian MLP ETF (AMLP) fell 0.8%.
- The Energy Select Sector SPDR ETF (XLE) rose 2%.
- The VanEck Vectors Oil Services ETF (OIH) rose 0.2%.
- The SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rose 0.9%.
With the exception of AMLP, the energy ETFs moved against crude oil prices. Crude oil is an important factor for energy ETFs.