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Could Bearish Drivers Halt US Crude Oil Price Recovery?

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

Crude oil prices 

June WTI (West Texas Intermediate) crude oil (IXC) (IYE) (USO) futures contracts have risen ~5% from their five-month low as of May 15, 2017. However, crude oil prices are below their 20-day, 50-day, 100-day, and 200-day moving averages of $48.7, $50, $52.5, and $51.5 per barrel as of May 12, 2017. These figures suggest more pain for oil prices.

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Crude oil’s highs in the last 15 months

WTI crude oil prices settled at $54.45 per barrel on February 23, 2017, the highest level since June 2015. As of May 12, 2017, crude oil prices were 12.1% below their highs.

Key bullish drivers for crude oil in 2017  

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Crude oil’s lows in the last 15 months 

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

As of May 12, 2017, crude oil prices have risen 82.5% from their 2016 lows. Higher crude oil (USL) (UCO) (IEZ) prices have a positive impact on the earnings of oil producers such as Carrizo Oil & Gas (CRZO), PDC Energy (PDCE), and Continental Resources (CLR).

Key bearish drivers for crude oil in 2017  

  • a rise in US crude oil rigs to more than a two-year high
  • near-record US crude oil inventories
  • a rise in US crude oil production 

Crude oil price forecasts  

Some Wall Street analysts believe that oil could test $40 per barrel in 2017 if supplies from the US keep on rising. For more on crude oil price forecasts, 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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