Bearish drivers for crude oil prices
The expectation of a rise in crude oil production from Libya, Iran, and Nigeria in 2017 compared to 2016 could pressure crude oil (BNO) (ERY) (PXI) (IEZ) (USL) (USO) (UCO) prices. For more on crude oil prices, read Part 1 of this series.
Donald Trump’s victory, the strengthening dollar, rising US crude oil rigs, and crude oil, gasoline, and distillate inventories could limit the upside for crude oil prices in 2017.
Crude oil price forecasts
RJ O’Brien Associates expects that Brent crude oil prices could breach $60 per barrel in 1H17.
Jadwa Research, a Riyadh-based market research company, thinks that Brent crude oil prices could average $55 per barrel in 2017.
Lukoil’s vice president expects that Brent crude oil prices could average $60 per barrel in 2017. Simmons & Co. International expects crude oil prices to trade between $50 per barrel and $60 per barrel in 2017.
Goldman Sachs expects Brent crude oil to average $58 per barrel in 2H17. Likewise, it expects WTI crude oil prices to average $57.50 per barrel for the same period.
A Wall Street Journal survey of major banks predicts that Brent crude oil prices will average $56 per barrel in 2017. It expects that US crude oil prices will average $54 per barrel in 2017.
The EIA (U.S. Energy Information Administration) estimates that US and Brent crude oil prices will average $51 per barrel and $52 per barrel, respectively, in 2017.
Impact on ETFs and stocks
The rollercoaster ride in crude oil prices can impact oil and gas producers’ earnings like Chevron (CVX), Synergy Resources (SYRG), ConocoPhillips (COP), Cobalt International Energy (CIE), and QEP Resources (QEP).
Moves in crude oil prices also impact funds such as the ProShares UltraShort Bloomberg Crude Oil (SCO), the Guggenheim S&P 500 Equal Weight Energy ETF (RYE), the Fidelity MSCI Energy ETF (FENY), the Energy Select Sector SPDR ETF (XLE), and the SPDR S&P Oil & Gas Equipment & Services ETF (XES).
For more on crude oil prices, read What Can Investors Expect in the Crude Oil Market in 2017?, Saudi Arabia: Weather Will Be a Key Demand Driver of Oil in 2H16, US Election: How Will It Impact the Stock and Energy Markets, and Crude Oil Prices Skyrocket as OPEC Agrees to Cut Production.
For more on crude oil price forecasts, read Will Crude Oil Prices Test 3 Digits Again and EIA and Goldman Sachs Upgrade Crude Oil Price Forecasts.
For related analysis, visit Market Realist’s Energy and Power page.