X
<

OPEC Report: Could US Crude Oil Break above the $50 Mark?

PART:
1 2 3 4
OPEC Report: Could US Crude Oil Break above the $50 Mark? PART 1 OF 4

OPEC Report: Could US Crude Oil Break above the $50 Mark?

US crude oil

On September 12, 2017, US crude oil (USO) (USL) October futures rose 0.3% and closed at $48.23 per barrel. However, from September 5 to September 12, 2017, US crude oil (DBO) October futures fell 0.9%.

In the trailing week, the S&P 500 Index (SPY) and the Dow Jones Industrial Average Index (DIA) rose 1.6% and 1.7%, respectively. These equity indexes ignored the fall in crude oil prices.

OPEC Report: Could US Crude Oil Break above the $50 Mark?

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

Receive e-mail alerts for new research on DBO

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.

OPEC report

OPEC released its monthly oil market report on September 12, 2017. Based on secondary sources, OPEC crude oil production in August 2017 stood at ~32.8 million barrels per day—a decline of 79,100 barrels per day compared to July 2017.

However, the production level is still 0.26 million barrels per day higher than the OPEC-pledged output limit of 32.5 million barrels per day. OPEC expects world oil demand to grow ~1.4 million barrels per day in 2017, which is 50,000 barrels per day higher than its previous estimate.

The OECD estimates that commercial oil stocks in its member countries, expressed in days of forward cover, totaled 62.9 days in July—2.7 days more than the five-year average. In June 2017, it was 4.1 days more than the five-year average.

This contraction shows the diminishing level of inventories that could boost US crude oil above the $50 mark. Since the start of July 2017, US crude oil active futures have struggled to close over the psychologically important level of $50.

Moving averages

On September 12, 2017, US crude oil active futures settled 1.3%, 1.6%, and 1.8% above their 20-day, 50-day, and 100-day moving averages, respectively. On September 11, 2017, US crude oil futures again moved above the 20-day moving average.

While the 50-day moving average was trading 4.1% below the 200-day moving average, the difference between these two moving averages has contracted in the last five trading sessions. These trends are bullish technical signs for US crude oil futures.

X

Please select a profession that best describes you: