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Crude Oil's Impressive Performance, So Far


  • Holding above $60 per barrel on NYMEX.
  • Backwardation equals tight supplies.
  • Cracks at the higher end of last year's range with oil higher.
  • Brent slipping on OPEC games.
  • Aramco IPO- Saudis crossing their fingers- Bullish and bearish factors At Play.

On June 21, 2017, the price of nearby NYMEX crude oil futures found a bottom at $42.05 per barrel. By the end of the year, the energy commodity was flirting with the $60 level and on January 25, as the dollar slipped crude oil found a top at $66.66 per barrel.

Crude oil appreciated by 58.5% in a little over seven months, an impressive move considering the price was trading at $26.05 per barrel in February 2016. There have been many factors that contributed to the ascent of the price of oil. OPEC decision to keep production quotas in place until the end of 2018 sparked the initial rally in June, and economic growth around the world continued the pressure on the upside. Increased demand for gasoline and distillate products supported the price as crack spreads consistently outperformed the raw oil during the second half of 2017 and into early 2018.

Crude oil can be a highly volatile commodity. The price fell from over $107 per barrel in June 2014 to the February 2016 lows at $26.05. The mid-point of the move from the highs to the lows over the past almost four years is at $66.89 per barrel, just 23 cents above the January 25 peak. While crude oil has declined by over $5 from the recent highs, the price action has been impressive given the performance of other commodities markets, as well as the dollar and markets across all asset classes.

Holding above $60 per barrel on NYMEX

After trading down to a low of $58.07 per barrel on February 9, NYMEX nearby crude oil futures have been holding above the $60 per barrel level.

Source: CQG

As the daily chart of the active month April NYMEX futures contract illustrates, the energy commodity only spent a brief period in

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This article was written by

Andrew Hecht profile picture

Andrew Hecht is a 35-year Wall Street veteran covering commodities and precious metals.

He runs the investing group The Hecht Commodity Report, one of the most comprehensive commodities services available. It covers the market movements of 20 different commodities and provides bullish, bearish and neutral calls; directional trading recommendations, and actionable ideas for traders. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (5)

Robert Boslego profile picture
Aramco IPO: "any international listing would be announced in due course, if at all."

Hi Mr. Boslego,
Will Aramco's first decade will be better after $2 Tr IPO than that of PetroChina IPO and after? There should be at least some lesson for novices like me in comparing the two. What is it? Hopefully you will write about it sometime. Thanks in advance.
PetroChina lacked the reserves. If the same is true for Saude Aramco, it will mean sky-high oil prices
Thanks for helping make sense from the chaos.
Ruben123 profile picture
very good article as always...isn't uco also has advantage of roll over gain because of backwardation?
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