uploads///Crude oil chart

Crude Oil Prices Are Trading within a Rectangular Trading Channel

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Nov. 4 2015, Updated 8:10 a.m. ET

Trading channel 

December WTI (West Texas Intermediate) crude oil futures trading in NYMEX fell for the first time after testing resistance of $46 per barrel on November 2, 2015. Prices have been fluctuating within the narrow range of $43–$50 per barrel since September 2015. Global oversupply concerns are dragging crude oil prices lower.

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Key pivots 

The consensus of rising demand from Asian majors like India could boost crude oil prices. The US WTI crude oil prices could see resistance at $50 per barrel. Prices tested this level in July 2015. On the other hand, record production from Russia could drag crude oil prices lower. The next support for crude oil prices is seen at $38 per barrel. Prices tested this mark in August 2015.

Crude oil prices forecast

Citigroup forecasts that WTI oil prices could hit $32 per barrel due to oversupply concerns. Société Generale forecasts that oil prices could trade around $49.40 per barrel in 2016. The World Bank estimates that crude oil prices could average $52 per barrel in 2015. 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. Crude oil prices are also trading below the 20-day, 30-day, and 50-day moving averages. These averages suggest that oil prices could trade lower.

Falling crude oil prices impact oil majors’ profitability like ConocoPhillips (COP), Chevron (CVX), Shell (RDS.A), and Occidental Petroleum (OXY). They also affect ETFs like the iShares US Oil & Gas Exploration & Production ETF (IEO) and the PowerShares DWA Energy Momentum ETF (PXI).

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