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Is the Worst Over for the Crude Oil Market?

PART:
1 2 3 4 5 6
Part 4
Is the Worst Over for the Crude Oil Market? PART 4 OF 6

Will US Crude Oil Prices Stay above $50 per Barrel?

Energy calendar this week

Let’s track some important events for crude oil and natural gas from August 1–4, 2017.

  • August 1: The American Petroleum Institute will release its weekly crude oil and gasoline stockpile report.
  • August 2: The EIA (U.S. Energy Information Administration) will release its Weekly Petroleum Status Report.
  • August 3: The EIA will release its weekly natural gas inventory report.
  • August 4: Baker Hughes will release its US crude oil and natural gas rig count report.

Will US Crude Oil Prices Stay above $50 per Barrel?

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Crude oil futures 

WTI (West Texas Intermediate) crude oil (RYE) (USL) (PXI) prices have fallen almost 12.0% year-to-date due to the rise in production for the United States, Libya, Nigeria, Brazil, and Canada in 2017. However, WTI crude oil has risen almost 17.0% from the ten-month low on June 21, 2017. For more on bullish drivers, read Part 1 of this series.

The roller coaster ride in crude oil prices impacts oil and gas producers such as ExxonMobil (XOM), PDC Energy (PDCE), and Cobalt International Energy (CIE).

US crude oil prices are at a two-month high. Higher compliance by OPEC (Organization of the Petroleum Exporting Countries) is key for oil prices to stay above $50 per barrel.

High and low

WTI crude oil (IXC) (IYE) futures hit $26.21 per barrel on February 11, 2016, the lowest level in 13 years. On the other hand, prices hit $54.45 per barrel on February 23, 2017, the highest level in more than two years.

US crude oil forecast

Oil traders are still skeptical over the success of the production cut deal. Lower compliance with the production cut deal in June and July 2017 has pressured oil prices.

Lower compliance with the production cut deal by OPEC and the rise in production by US shale oil producers have led to the delay in the rebalancing of the oil market. Consequently, in July 2017, Wall Street analysts downgraded the crude oil price forecast for the sixth month in a row.

For more information on crude oil price forecasts, read Hedge Funds’ Net Long Positions in US Crude Oil Rose Again.

In the next part of this series, we’ll see how Cushing crude oil inventories impact prices.

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