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US Crude Oil Prices Might Test a New High

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Crude oil prices and US stock exchanges 

US WTI (West Texas Intermediate) crude oil (FXN) (ERY) (RYE) (FENY) prices are near a 19-month high as of February 28, 2017.

Broader markets such as the S&P 500 (SPY) (SPX-INDEX), the Dow Jones Industrial Average (DJIA-INDEX), and the NASDAQ Composite Index (COMP-INDEX) are near all-time highs. Bullish momentum in the US stock market could support oil demand and oil prices.

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Crude oil’s highs in the last 12 months  

US WTI crude oil prices settled at $54.45 per barrel on February 23, 2016—the highest level since June 2015. As of February 28, 2017, crude oil prices were 0.8% below their high.

Key bullish drivers for crude oil in 2017  

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Crude oil’s lows in the last 12 months 

NYMEX crude oil settled at $26.21 per barrel on February 11, 2016. Crude oil prices hit 13-year lows due to the following factors:

As of February 28, 2017, crude oil prices have risen 106% from their 2016 lows. Higher crude oil (IYE) (USL) (IEZ) (IXC) prices have a positive impact on oil producers’ earnings such as Occidental Petroleum (OXY), Cobalt International Energy (CIE), QEP Resources (QEP), and Synergy Resources (SYRG).

Key bearish drivers for crude oil in 2017 

Crude oil price forecasts  

Goldman Sachs (GS) expects that US WTI and Brent crude oil prices could average at $57.50 per barrel and $59 per barrel in 2Q17, respectively. For more, read the last part of the series.

In the next part of the series, we’ll look at how Cushing crude oil inventories impact crude oil prices.

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