WTI (West Texas Intermediate) crude oil futures contracts for December delivery rose for the fourth time in the last five trading sessions. Prices rose 10% in the last five sessions—led by the gasoline price rally and supply outage. However, prices were trading close to the key resistance of $48 per barrel on November 3, 2015.
Support and resistance
The falling gasoline and distillates inventories could push crude oil prices higher. Crude oil prices could see the next resistance at $50 per barrel. Prices hit this mark in July 2015. In contrast, the rising crude oil inventory could push crude oil prices lower. Crude oil prices could see next support at $38 per barrel. Prices hit this level in August 2015.
Oil price estimates
BP (BP) stated that improving technology could boost crude oil supplies in the long term at a very affordable price. It estimates that oil reserves could rise to 4.8 trillion barrels in 2016 compared to 2.9 trillion barrels in 2015. However, Citigroup and Goldman Sachs suggest that oil prices will fall in the short term. The EIA (U.S. Energy Information Administration) forecasts that WTI oil prices could average around $50 per barrel in 2015 and $55 per barrel in 2016. The rectangular trading range suggests that crude oil prices could fluctuate between $43 per barrel and $51 per barrel in the short term. In contrast, the 20-day, 30-day, and 50-day moving averages suggest that oil prices could fall more.
The long-term lower crude oil prices impact the margins of ConocoPhillips (COP), Chevron (CVX), and Occidental Petroleum (OXY). They also impact ETFs like the iShares US Oil & Gas Exploration & Production ETF (IEO) and the PowerShares DWA Energy Momentum ETF (PXI).