Short-term crude oil prices
Crude oil prices have rallied almost 30% since the low in February 2016. However, they have fallen almost 6% in 2016 due to record supplies from the US to Russia. Oil prices are still following the long-term bearish trend. The US crude oil inventory is crucial for crude oil prices in the short term.
Key support levels
Short covering and lower crude oil prices could support crude oil prices. Crude oil prices could see resistance at $37 per barrel. Prices hit this mark in November 2015. In contrast, rising production from Iran and the appreciating US dollar could drag crude oil prices lower. The key support for crude oil prices is $25 per barrel. Prices tested this mark in 2003.
Crude oil price forecast
A recent poll from Reuters suggests that crude oil prices could hit $40 per barrel in 2016. Morgan Stanley estimates that crude oil prices could average around $30 per barrel in 2016. The U.S. Energy Information Administration estimates that Brent crude oil prices could average $38 per barrel in 2016 and $50 per barrel in 2017. WTI (West Texas Intermediate) oil prices could average $38 per barrel in 2016 and $50 per barrel in 2017. On the other hand, the National Bank of Abu Dhabi suggests that crude oil prices could test $20 per barrel in the short term due to fragile economic conditions in the Middle East and North Africa region. Read How Are Oil Prices Squeezing OPEC Members’ Budgets? to learn more. PSW Investments forecasts that crude oil prices could average between $35 and $45 per barrel in 2016. Crude oil’s forward curve suggests that crude oil prices could hit $40 per barrel in 2016.
The recent uptick in crude oil prices benefits oil and gas producers like Petrobras (PBR), Devon Energy (DVN), Chevron (CVX), Noble Energy (NBL), PetroChina (PTR), Apache (APA), WPX Energy (WPX), and PDC Energy (PDCE).
The volatility in crude oil prices impacts ETFs and ETNs like the iShares Global Energy ETF (IXC), 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).