Trend in crude oil prices
Crude oil prices have rallied more than 40% since the lows in February 2016. So, they entered into the short-term bull market. But, they’re still under a long-term bearish trend. The US dollar and slowing US crude oil production have been swinging crude oil prices.
Support and resistance
The consensus of rising crude oil production from Iran will continue to put pressure on oil prices in 2016 and 2017. The key support for crude oil prices is seen at $25 per barrel. Prices hit this mark in 2003. On the other hand, slowing US crude oil production could support oil prices. The next key resistance for crude oil prices is seen at $48 per barrel. Prices tested this mark in November 2015.
Crude oil price estimates
A Reuters poll suggests that Brent prices will average around $40 per barrel in 2016. The survey added that Brent crude oil prices are expected to average $65–$70 per barrel by 2020. The IMF (International Monetary Fund) forecasts that crude oil prices—Intercontinental Exchange, Brent, Dubai, and West Texas Intermediate—could average around $45.30 per barrel in 2020. In contrast, the Russian energy minister suggested that if crude oil prices rise above $50 per barrel, we could see oversupply return in the market.
The roller coaster ride of crude oil prices impacts upstream players like Ultra Petroleum (UPL), Whiting Petroleum (WLL), QEP Resources (QEP), Synergy Resources (SYRG), and PDC Energy (PDCE). It also impacts ETFs and ETNs like the iShares U.S. Energy ETF (IYE), the iShares U.S. Oil Equipment & Services ETF (IEZ), and the VelocityShares 3x Long Crude Oil ETN (UWTI).