uploads/2015/08/US-oil-chart-5-August-20151.png

Crude Oil Prices Consolidate to around $46 per Barrel

By

Updated

Price channel

September WTI (West Texas Intermediate) crude oil futures prices rose for the first time in the last four days. Prices rose from the key support of $45 per barrel on August 4, 2015. Oil prices have been fluctuating in a downtrend channel for more than a month. The consensus of falling crude oil inventories is impacting crude oil prices.

Article continues below advertisement

Key pivots

Bearish traders could see support for crude oil prices at $44 per barrel. The massive supply consensus and slowing demand could drag crude oil prices lower. Prices hit this level in March 2015. In contrast, bullish traders could see resistance at $55 per barrel. Prices hit this mark in July 2015. The falling crude oil inventories and lower crude oil prices might benefit crude oil prices.

The US crude oil price chart suggests that WTI prices could fluctuate between $44 and $50 per barrel in the near term. Crude oil prices might average $50–$60 per barrel over the long term, according to Goldman Sachs’ estimates. The EIA (U.S. Energy Information Administration) estimates that WTI crude oil prices will average $55 per barrel in 2015 and $62 per barrel in 2016

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

They also impact oil producers like Murphy Oil (MUR), Anadarko Petroleum (APC), and ConocoPhillips (COP). They account for 6.39% of the Energy Select Sector SPDR ETF (XLE). These companies have a crude oil production mix that’s greater than 41% of their total production.

Advertisement

More From Market Realist