uploads///WTI prices sept

Oil Traders Bet about Crude Oil Prices over the Next 12 Months

By

Nov. 20 2020, Updated 5:03 p.m. ET

Supply and demand gap

Lower crude oil prices tend to narrow the supply and demand imbalance. Read Global Crude Oil Supply and Demand Could Balance in 2017. In contrast, high crude oil, gasoline, and distillate inventories, easing supply outages, as well as high OPEC and Russian crude oil production could pressure crude oil prices.

Article continues below advertisement

Crude oil price forecast

A Bloomberg survey of 15 senior oil traders and executives showed that US crude oil prices could trade between $40 per barrel and $60 per barrel over the next 12 months. High US crude oil inventories and rising production from large producers like Russia and Saudi Arabia will delay the rebalancing activity by six months. Read Stumbling Blocks for Crude Oil: Is a Market Rebalance Delayed? to learn more.

Socar Trading estimates that crude oil prices could trade between $40 per barrel and $55 per barrel in the short term.

French investment bank Natixis reported that the failure of oil producers’ meeting could see crude oil prices trade below $50 per barrel for the rest of 2016. For more, read Part 1 of this series.

The EIA (U.S. Energy Information Administration) estimates that US crude oil prices will average $41.92 per barrel in 2016 and $50.58 per barrel in 2017. The EIA also estimates that Brent crude oil prices will average $42.54 per barrel in 2016 and $51.58 per barrel in 2017.

Impact on ETFs and stocks 

Uncertainty in crude oil prices impacts oil and gas producers’ earnings such as SM Energy (SM), Carrizo Oil & Gas (CRZO), PDC Energy (PDCE), and QEP Resources (QEP).

It also impact funds such as the Fidelity MSCI Energy ETF (FENY), the ProShares Ultra Oil & Gas (DIG), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the Direxion Daily Energy Bear 3x ETF (ERY), the VelocityShares 3x Inverse Crude Oil ETN (DWTI), and the PowerShares DWA Energy Momentum ETF (PXI).

Read Will Crude Oil Prices Test 3 Digits Again? for information on crude oil price forecasts.

For related analysis, visit Market Realist’s Energy and Power page.

Advertisement

More From Market Realist

  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market RealistLogo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.