The WTI crude spot price edged 0.2% lower for the week, closing at $53.75 per barrel on Friday, while the Brent crude spot price lost 1.57% for the week to close at $55.76 per barrel, despite another bearish EIA weekly report on Wednesday. Crude oil prices rebounded on Thursday, following a Reuters report saying that the Organization of the Petroleum Exporting Countries, or OPEC, may extend its production cut agreement with non-OPEC members.
Short positions in WTI crude oil futures contracts held by producers or merchants totaled more than 703,430 contracts as of February 10, 2017, another record high, according to data from the U.S. Commodity Futures Trading Commission, or CFTC. The open interest dropped 7,215 contracts from a record high last week to 2,183,943 contracts, equivalent to about 2.18 billion barrels of WTI crude oil. Crude oil producers could take short hedge positions to lock in a future selling price to protect against a falling crude oil price. Some banks also require producers to hedge against future price risks as a condition for lending.
The EIA weekly U.S. oil inventory report on Wednesday showed that domestic crude supplies increased by another 9.527 million barrels to a record 518.12 million barrels, excluding the Strategic Petroleum Reserve, in the week ending February 10, compared to the S&P Global Platts forecast for a stockpile increase of 3.25 million barrels. The American Petroleum Institute, or API, inventory data on Tuesday showed a U.S. crude inventory build of 9.9 million barrels.
Separately, the EIA said the weekly U.S. crude oil production decreased 1,000 barrels per day, or bpd, for the week ending February 10, to 8.977 million bpd. U.S. crude oil output increased 16,000 bpd to an average of 8.958 million bpd in February, compared to a January average of 8.942 million bpd. Output has fallen about 6.69% from the peak level of 9.60 million bpd in June 2015. Houston-based oilfield services company Baker Hughes Inc. said on Friday that the U.S. oil rig count rose another 6 to 597, compared to 316, when the rig count hit the low on June 6, 2016.
S&P 500 Summary: +5.02% YTD as of 02/17/17
Barclay Hedge Fund Index: +1.43% YTD
Outperforming Sectors: Information technology +9.10 YTD, Healthcare +6.73% YTD, Consumer discretionary +6.37% YTD, Industrials +5.14% YTD, Materials +5.13% YTD, and Consumer staples +5.12% YTD.
Underperforming Sectors:, Financials +4.98% YTD, Real Estate +1.90% YTD, Utilities +1.56% YTD, Telecommunication services –4.51% YTD, and Energy –5.63%