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Why Brent and US Crude Oil Futures Could Make a U-Turn

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Part 5
Why Brent and US Crude Oil Futures Could Make a U-Turn PART 5 OF 5

Decoding US Crude Oil Price Forecasts and Moving Averages

US crude oil moving averages

August US crude oil (VDE) (IEZ) (XES) futures are trading above their 20-day moving average of $45 per barrel as of July 3, 2017. However, US crude oil futures are trading below their 50-day, 100-day, and 200-day moving averages of $47.48, $50, and $51.6 per barrel, respectively, as of the same date. These long-term moving averages suggest that crude prices could trade lower.

The roller coaster ride in crude oil prices affects the earnings of oil and gas producers such as SM Energy Company (SM), Triangle Petroleum (TPLM), Apache (APA), and PDC Energy (PDCE).

Decoding US Crude Oil Price Forecasts and Moving Averages

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Crude oil price forecasts

The latest forecasts from Goldman Sachs estimate that US crude oil prices could average $47.50 per barrel in the next three months, $7.5 per barrel lower than the previous estimate. Goldman Sachs thinks that rising crude oil production in the United States, Libya, and Nigeria could pressure crude oil prices.

Meanwhile, Goldman Sachs thinks that the oil market is still moving toward balance. It expects global crude oil inventories to fall. It also expects demand to keep rising and OPEC to potentially aim for deeper production cuts.

A Reuters survey reduced the forecast for Brent and WTI prices by $2 per barrel for 2017 due to oversupply concerns. A market survey estimates that WTI crude oil prices will average $53 per barrel in 2017. It also estimates that Brent crude oil prices will average $55 per barrel in 2017. WTI and Brent crude oil prices averaged $43.3 per barrel and $43.7 per barrel, respectively, in 2016.

Read US and Brent Crude Oil Futures: Will the Recovery Be Short-Lived? and US Crude Oil Production and Rigs Drive Prices to learn more about crude oil.

Read Looking Ahead: Natural Gas and Crude Oil Prices Next Week for more on natural gas prices.

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