October WTI (West Texas Intermediate) crude oil futures contracts hit an intraday low $39.86 per barrel on August 21, 2015. Prices hit the lowest level since March 2009. US crude oil prices have been fluctuating in a downward price channel since the last week of June 2015. The record supplies and record inventory data are influencing crude oil prices.
Bottom fishing, short covering, and lower crude oil prices could support crude oil prices. The nearest resistance for crude oil prices is seen at $50 per barrel. Prices hit this level in August 2015. In contrast, weak demand cues and record supplies could drag crude oil prices lower. The nearest support for crude oil prices is seen at $38 per barrel. Prices tested this level in February 2009.
Crude oil price charts suggest that crude oil prices could average between $33 per barrel and $43 per barrel in the near term. The EIA (U.S. Energy Information Administration) estimates that crude oil prices could average around $49 per barrel in 2015 and $54 per barrel in 2016. Citigroup forecast that crude oil prices could hit $32 per barrel in the near term.
US oil and gas producers like Murphy Oil (MUR), Noble Energy (NBL), and Devon Energy (DVN) are negatively impacted due to falling crude oil prices. They account for 3.31% of the Energy Select Sector SPDR ETF (XLE). These companies’ crude oil production mix is more than 41% of their total production.
In contrast, falling crude oil prices benefit ETFs like the ProShares Ultra Short Bloomberg Crude Oil ETF (SCO). ETFs like the Velocity Shares 3X Long Crude ETN (UWTI) benefit from rising crude oil prices.