Crude Oil Prices Stalling Ahead Of US Energy Earnings And GDP Data

Oil Fundamental Forecast: Neutral

  • Crude oil prices stalled with S&P 500, trading in a narrow range on mixed news
  • The commodity awaits the US Energy Security Conference, US-Japan trade talks
  • Earnings from Chevron and Exxon Mobil due. Oil eyes US first quarter GDP too


Crude oil prices spent most of last week consolidating between a narrow range. The sentiment-linked commodity followed a similar performance on Wall Street where the S&P 500 also appeared to stall in its dominant uptrend since late December. The rather tepid performance in both of them, especially before the Good Friday holiday, reflected a mixed start to US earnings as the health-care sector dragged down stocks.

Efforts from the Organization of the Petroleum Exporting Countries (OPEC) continue to support the commodity on the sidelines. Saudi Arabia output, a key member, declined to 10.14m barrels per day (b/d) in February as petroleum exports softened to 6.98m b/d. On the chart below, I have created a visualization of oil’s rise alongside the S&P 500 and declines in OPEC production.

Crude Oil, S&P 500 and OPEC Production


With that in mind, crude oil prices will be looking to either extend their dominant downtrend or risk stalling in the near-term. Fundamentals that are weighing against the commodity include solid US production and concerns that major central banks have brought about the global growth outlook. Better-than-expected Chinese first quarter GDP failed to inspire much market confidence last week.

This is a little concerning as the world’s second-largest economy is a major consumer of petroleum. The week ahead holds the Annual Energy Security Conference in Washington DC on Wednesday. The panel is expected to focus on evolving geopolitical realities and trade relationships between the US and the world. Concerns may be brought about global growth despite US-China trade talks progressing.

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