August WTI (West Texas Intermediate) crude oil futures contracts settled above $52 per barrel for third day in a row. Prices closed above the key support level of $52 per barrel as of July 14, 2015. Crude oil prices have been trading in a narrow range of $51 and $53 per barrel. Iran’s nuclear deal and falling US stocks are driving crude oil prices.
The consensus of falling US inventories could support crude oil prices. The next resistance for crude oil prices is seen at $55 per barrel. Prices hit this mark in July 2015. The massive supply consensus will continue to put pressure on crude oil prices. The next support for crude oil prices is seen at $50 per barrel. Prices tested this level in April 2015.
Crude oil charts suggest that prices could fluctuate between $50 and $55 per barrel in the near term. Goldman Sachs estimates that WTI prices could fall to $45 per barrel—led by the strong dollar and oversupply estimates.
Energy producers like Penn Virginia (PVA), Clayton Williams Energy (CWEI), and Halcon Resources (HK) are negatively affected by falling oil prices. They account for 4.55% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). These stocks also have a crude oil production mix that’s greater than 38% of their total production.