Crude oil supply and demand balance
Market surveys project that the current crude oil supply could outstrip demand by 1 MMbpd–1.25 MMbpd (million barrels per day). Read Why Did Crude Oil Prices Rise from a 3-Week Low? to learn more.
High crude oil, gasoline, and distillate inventories as well as the strengthening dollar could pressure crude oil prices.
EIA’s crude oil price forecasts
The EIA (U.S. Energy Information Administration) estimates that US WTI (West Texas Intermediate) crude oil prices will average $47 per barrel in November 2016 and December 2016.
The EIA also estimates that US WTI crude oil prices will average $42.78 per barrel in 2016 and $49.99 per barrel in 2017. It estimates that Brent crude oil prices will average $43.43 per barrel in 2016 and $50.99 per barrel in 2017. WTI and Brent crude oil prices averaged $48.67 per barrel and $52.32 per barrel, respectively, in 2015.
Crude oil price forecasts
SAXO Bank estimates that Brent crude oil prices will trade between $48.4 per barrel and $49.4 per barrel in the short term.
World Bank estimates that Brent crude oil prices will average $43 per barrel in 2016 and $55 per barrel in 2017.
A Wall Street Journal survey from major banks predicts that Brent crude oil prices will average $56 per barrel in 2017. US crude oil prices will average $54 per barrel in 2017.
Impact on ETFs and stocks
The ups and downs in crude oil prices can impact oil and gas producers’ earnings such as Comstock Resources (CRK), Cobalt International Energy (CIE), Goodrich Petroleum (GDP), and QEP Resources (QEP).
Volatility in crude oil prices also impacts funds such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the PowerShares DB Crude Oil Double Short ETN (DTO), the ProShares Ultra Bloomberg Crude Oil (UCO), the Fidelity MSCI Energy ETF (FENY), the Direxion Daily Energy Bear 3x ETF (ERY), the VelocityShares 3x Inverse Crude Oil ETN (DWTI), and the PowerShares DWA Energy Momentum ETF (PXI).
For more on crude oil prices, read Saudi Arabia: Weather Will Be a Key Demand Driver of Oil in 2H16. For more on crude oil price forecasts, read Will Crude Oil Prices Test 3 Digits Again? and Major Banks Downgrade Crude Oil Prices despite OPEC’s Deal.
For related analysis, visit Market Realist’s Energy and Power page.