Oil prices were volatile during the Sept. 16 week as a number of factors affected the value of the commodity. WTI crude oil ended the week at $43.03 a barrel, down from $46.28 at the beginning of the week. Brent crude ended the week at $45.77 a barrel, down from $47.82 at the beginning of the week.
Wednesday’s weekly Petroleum Status Report from the Energy Information Administration showed little change in oil inventories in the U.S. for the week. Oil inventory was down 600,000 barrels to 510.8 million barrels. Globally oil supply has been holding steady at 95.93 mb/d according to the International Energy Agency’s second quarter data on oil supply.
Friday’s North American oil rig count report provided by Baker Hughes (BHI) showed a decrease of four in the region’s total rig count. In both the U.S. and Canada the number of operating rigs decreased by two.
In the U.S., energy stocks traded lower for the week. In the S&P 500 energy sector, the following stocks led the week’s losses:
Range Resources (RRC, Financial) down by 5.05%.
Cabot Oil & Gas Corp. (COG, Financial) down by 2.96%.
Southwestern Energy (SWN, Financial) down by 2.84%.
With U.S. supply and North American rig counts basically unchanged, U.S. data had little impact on prices globally and international factors were more influential. An agreement between Saudi Arabia and Algeria and the upcoming meeting of OPEC officials later this month at the International Energy Forum in Algiers, Algeria, on Sept. 26 are two factors that have been increasing confidence in oil price improvement for the near-term. However, production from OPEC country Iran has been a leading factor keeping prices low. At the last meeting of OPEC officials in Doha, Iran kept OPEC from reaching a final agreement. Reports this week now show Iran nearly doubling production of crude oil on a monthly basis since December. The increase in output for the country follows the release of political sanctions previously imposed on its production levels. Now that the sanctions have been lifted, Iran is taking full advantage of its production capabilities and could likely continue to be uncooperative in OPEC production level discussions.
A CNBC report Friday provided more details on how oil prices ended the week. Oil prices overall are predicted to remain volatile leading up to OPEC’s unofficial meeting later this month.
Disclosure: I do not own any stocks included in this article.
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