uploads///Crude oil price chart July

Crude Oil Prices Break below the Key Support of $50 per Barrel



Trading range

September WTI (West Texas Intermediate) crude oil futures contracts trading in NYMEX broke below the key support of $50 per barrel and settled at $49.19 per barrel on July 22, 2015. The rising crude oil inventories and appreciating US dollar are swinging WTI prices.

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Key pivots

The pessimistic sentiments of oversupply and record inventories will continue to drag crude oil prices lower. The nearest support for WTI prices is seen at $44 per barrel. Prices hit this mark in March 2015. In contrast, bullish momentum could support crude oil prices. The key resistance for WTI crude oil prices is seen at $55 per barrel. Prices hit this level in July 2015. Lower crude oil prices will boost the demand for crude oil.

World Bank forecasted that crude oil prices would average $57 per barrel in 2015—up from the previous forecast of $53 per barrel in April 2015. According to the trading range pattern, crude oil prices broke below the $50 per barrel key support level. This suggests that prices could hit $47 per barrel. However, crude oil prices could rebound on any positive news.

Lower crude oil prices benefit ETFs like the ProShares UltraShort Bloomberg Crude Oil (SCO). In contrast, rising crude oil prices benefit ETFs like the VelocityShares 3X Long Crude ETN (UWTI).

Energy producers like Penn Virgina (PVA), QEP Resources (QEP), and SM Energy (SM) are also impacted by falling crude oil prices. These companies account for 6.18% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). The crude oil production mix of these stocks is more than 38% of their total production.


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