X
<

Cushing Crude Oil Inventories and Rig Count Impact Oil Prices

PART:
1 2 3
Part 3
Cushing Crude Oil Inventories and Rig Count Impact Oil Prices PART 3 OF 3

EIA and Goldman Sachs Upgrade Crude Oil Price Forecasts

Bearish drivers  

Donald Trump’s victory, the strengthening dollar, rising US crude oil rigs, and high crude oilgasoline, and distillate inventories could limit the upside for crude oil (BNO) (ERY) (PXI) (USL) (USO) (UCO) prices. For more on crude oil prices, read Federal Reserve and US Inventories Impact Crude Oil Prices. For more on crude oil rigs, read the previous part of the series.

EIA and Goldman Sachs Upgrade Crude Oil Price Forecasts

Interested in FENY? Don't miss the next report.

Receive e-mail alerts for new research on FENY

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

Goldman Sachs 

Goldman Sachs (GS) expects that successful implementation of OPEC (Organization of the Oil Exporting Countries) and non-OPEC producers’ plan to cut crude oil production will reduce the oversupply in the market and support crude oil prices.

Goldman Sachs expects Brent crude oil to average $58 per barrel in 2H17—compared to its previous forecast of $51.50 per barrel. Likewise, it expects WTI crude oil prices to average $57.50 per barrel for the same period.

However, the successful implementation of Donald Trump’s energy policies would lead to a rise in US crude oil production. The rise in non-OPEC production in 2017 would also pressure crude oil prices. Read How Does Non-OPEC Crude Oil Production Impact Crude Oil Prices? to learn more.

Crude oil price forecasts 

Wall Street Journal survey of major banks predicts that US and Brent crude oil prices will average $54 per barrel and $56 per barrel in 2017, respectively.

EIA’s crude oil price forecast 

The EIA (U.S. Energy Information Administration) estimates that US and Brent crude oil prices will average $51 per barrel and $52 per barrel, respectively, in 2017. It’s $1 per barrel more than the previous estimates. The EIA upgraded the crude oil price forecast due to the expectation of a reduction in crude oil production from OPEC producers.

Impact on ETFs and stocks 

Uncertainty in crude oil prices can impact oil and gas producers’ earnings such as Goodrich Petroleum (GDP), Marathon Oil (MRO), Chevron (CVX), Cobalt International Energy (CIE), and QEP Resources (QEP).

Volatility in crude oil prices also impacts funds such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the DB Crude Oil Double Short ETN (DTO), the Direxion Daily Energy Bull 3x ETF (ERX), the iShares US Energy (IYE), and the Fidelity MSCI Energy ETF (FENY).

For more on crude oil prices, read Saudi Arabia: Weather Will Be a Key Demand Driver of Oil in 2H16 and Winners and Losers in Energy after the US Election Results.

For more on crude oil price forecasts, read Will Crude Oil Prices Test 3 Digits Again? and Major Banks Downgrade Crude Oil Prices despite OPEC’s Deal.

For related analysis, visit Market Realist’s Energy and Power page.

X

Please select a profession that best describes you: