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Crude Oil Price Forecasts: Downgraded for the Fifth Month

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Part 6
Crude Oil Price Forecasts: Downgraded for the Fifth Month PART 6 OF 6

Crude Oil Price Forecasts: Downgraded for the Fifth Month

Hedge funds

On September 29, 2017, the U.S. Commodity Futures Trading Commission released its weekly “Commitment of Traders” report. Hedge funds increased their net bullish positions in US crude oil futures and options by 43,496 contracts to 251,788 contracts on September 19–26, 2017. These positions rose 21% week- over-week. The positions have risen 39% or by 70,336 contracts year-over-year.

Hedge funds’ net long positions in US crude oil (USO) (DBO) futures and options are at a five-week high. It suggests that hedge funds are bullish or less bearish on crude oil (UWT) (SCO) prices.

Crude Oil Price Forecasts: Downgraded for the Fifth Month

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Crude oil price forecasts 

The Wall Street Journal conducted a survey at the end of September 2017 on US and Brent crude oil price forecasts. The survey estimates that US crude oil (USO) (UCO) prices could average $50 per barrel in 2018—$1 per barrel lower than the previous survey conducted in August 2017.

The survey also reported that Brent crude oil (BNO) prices are expected to average $53 per barrel in 2018—also $1 per barrel lower than the previous survey.

Crude oil price forecasts have been downgraded for the fifth straight month due to oversupply concerns. Major oil producers’ production cut deal is expiring by March 2018. If the deal isn’t extended, we could see a rise in crude oil production from OPEC and Russia. US crude oil production could hit a record in 2018. All of these factors could pressure crude oil (DWT) prices.

The EIA (U.S. Energy Information Administration) estimates that US and Brent crude oil prices will average $49.5 per barrel and $51.6 per barrel in 2017 and 2018. US and Brent crude oil prices averaged $43.3 per barrel and $43.7 per barrel, respectively, in 2016.

Read Are US Crude Oil Supplies Getting Bearish for Oil Prices? and Crude Oil Has Risen since June: Time to Short Crude Oil Futures? for more on crude oil prices.

Read An Opportunity in Natural Gas? for updates on natural gas.

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