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Profit-Booking: Crude Oil Prices Fall More than 5%

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Uptrend channel 

WTI (West Texas Intermediate) crude oil prices for November delivery are showing the emergence of an uptrend channel. Prices have been fluctuating between $45 and $50 per barrel for the past five days. The consensus of the rising US crude oil inventory and oversupply concerns is dragging crude oil prices.

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Support and resistance 

The long-term lower crude oil prices could boost Asia’s demand for crude oil. Oil prices could see resistance at $52 per barrel. Prices hit this level in July 2015. In contrast, profit-booking and oversupply concerns could push crude oil prices lower. The nearest support for crude oil prices is seen at $38 per barrel. Prices tested this level in August 2015.

The Russian Energy Ministry forecasts that crude oil prices could average around $52 per barrel in 2015 and $55 per barrel in 2016. Societe Generale forecasts that US crude oil prices could average around $49.40 per barrel in 2016. Crude oil prices could average $50 per barrel in 2015 and $55 per barrel in 2016, according to the EIA’s (U.S. Energy Information Administration) forecast. Crude oil prices are trading above their 20-day and 50-day moving average. However, they’re still trading below their 100-day moving average.

The recent fall in crude oil prices could impact upstream players like Occidental Petroleum (OXY), BP (BP), and ExxonMobil (XOM). The volatility in oil prices impacts ETFs like the iShares Global Energy ETF (IXC) and the ProShares UltraShort Bloomberg Crude Oil ETF (SCO).

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