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Looking Ahead: Crude Oil Prices between $50 and $60 in 2017

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Bearish drivers   

The EIA (U.S. Energy Information Administration), International Energy Agency, and Goldman Sachs estimate that US crude oil production will increase in 2017—compared to 2016. However, implementation of Donald Trump’s energy policies could pressure crude oil (BNO) (ERY) (PXI) (USL) prices in 2017. For more on crude oil’s bearish drivers, read Part 3 of this series.

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Bullish drivers  

Major oil producers’ production cut, strong crude oil demand from the US and Asia, and record gasoline demand from the US could support crude oil (USO) (ERY) (DTO) (UCO) prices. On January 23, 2017, Iraq’s oil minister said that most oil producers are complying with the production cut plans.

Bernstein Energy reported that global oil inventories fell by 24 MMbbls (million barrels) to 5.7 billion barrels in 4Q16—compared to the previous quarter. Falling global inventories support crude oil prices. To learn more about crude oil’s bullish drivers, read Part 3 of this series.

Higher crude oil prices have a positive impact on oil and gas producers’ earnings like Marathon Oil (MRO), Chevron (CVX), Matador Resources (MTDR), and Goodrich Petroleum (GDP).

Crude oil price forecast 

Tortoise Capital Advisors thinks that US WTI and Brent crude oil prices could trade between $50 and $60 per barrel in 2017. It could hit $60 per barrel by the end of 2017. Reuters polls also suggest that crude oil prices could hit $60 per barrel by the end of 2017.

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EIA’s crude oil price forecast  

The EIA estimates that US WTI and Brent crude oil prices will average $52.5 per barrel and $53.5 per barrel, respectively, in 2017. It also estimates that US WTI and Brent crude oil prices will average $55.2 per barrel and $56.2 per barrel, respectively, in 2018. US WTI and Brent crude oil prices averaged $43.3 per barrel and $43.7 per barrel in 2016, respectively.

Bank of America  

Bank of America Merrill Lynch expects crude oil prices to hit $69 per barrel by June 2017. It thinks that slowing investments into oil and gas exploration and production projects could cause crude oil prices to rise in 2017.

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

For more on crude oil prices, read What Can Investors Expect in the Crude Oil Market in 2017 and US Election: How Will It Impact the Stock and Energy Markets.

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

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