WTI (West Texas Intermediate) crude oil futures for August delivery trading in NYMEX tested the key support level of $50 per barrel for the fourth time in the last ten trading sessions. Prices retreated from the key support level. Natural gas prices have been fluctuating in a narrow range of $51–$53 per barrel for the last ten sessions. The appreciating US dollar and oversupply concerns are influencing crude oil prices.
Key support and resistance
The long-term oversupply concerns could drag oil lower. US WTI fell for the third consecutive day. This pessimistic sentiment might push crude oil prices to test the support of $50 per barrel. Prices tested this level in July 2015. Slowing US output and falling inventories could support crude oil prices. The next resistance for US WTI crude oil prices is seen at $55 per barrel. Prices hit this level in July 2015.
The US crude oil price chart suggests that if oil prices break below the key support level of $50 per barrel, WTI could hit $47 per barrel. Then, prices could rebound. WTI crude oil prices could hit $45 per barrel through October 2015, according to estimates from Goldman Sachs.
Oil and gas producers like Continental Resources (CLR), SM Energy (SM), and Northern Oil (NOG) are also impacted by lower crude oil prices. Combined, they account for 5.76% of the SPDR S&P Oil & Gas Exploration & Production ETF (XOP). These stocks also have an oil production mix that’s greater than 38% of their production portfolio.