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Will Crude Oil Futures Prices Hit $39 per Barrel?

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Price channel 

WTI (West Texas Intermediate) crude oil futures for December delivery were marching towards the key support level of $44 per barrel on October 26, 2015. Prices have been fluctuating between $44 and $50 per barrel since September 2015. The consensus of rising crude oil stocks and weak demand could push crude oil prices lower.

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Key pivots 

Lower crude oil prices could boost crude oil consumption. The next resistance for crude oil prices is seen at $50 per barrel. Prices tested this level in July 2015. In contrast, the rising crude oil inventory consensus and weak demand could push crude oil prices lower. The next support for crude oil prices is seen at $38 per barrel. Prices hit this level in August 2015.

Crude oil price forecast 

Goldman Sachs (GS) estimates that crude oil prices could hit $20 per barrel in the worst-case scenario due to the appreciating dollar and massive supplies. The EIA (U.S. Energy Information Administration) projects that US crude oil prices could average around $50 per barrel in 2015 and $55 per barrel in 2016. The Energy Ministry of Russia estimates that crude oil prices could average around $52 per barrel in 2015 and $55 per barrel in 2016. Société Generale estimates that US WTI prices could trade around $49.40 per barrel in 2016.

Oil and gas producers like Chevron (CVX), ExxonMobil (XOM), Energy XXI (EXXI), ConocoPhillips (COP), and Marathon Oil (MRO) are negatively impacted due to falling crude oil prices. ETFs like the iShares US Oil & Gas Exploration & Production ETF (IEO) are also impacted by lower crude oil prices.

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