Crude oil futures and moving averages
July WTI (West Texas Intermediate) crude oil (USL) (SCO) (BNO) futures contracts rose more than ~5% for the week ending May 19, 2017. US crude oil futures are above their 20-day and 50-day moving averages of $48.6 and $50 per barrel as of May 19, 2017. Prices are below their 100-day and 200-day moving averages of $52.5 and $52 per barrel as of May 19, 2017.
OPEC’s meeting is scheduled on May 25, 2017. The expectation of a production cut deal extension could support oil prices. In OPEC’s previous meeting, US crude oil prices rose 9.3% in a single day on November 30, 2016. So, we can expect oil prices to rise after OPEC’s meeting this week.
Crude oil’s highs in the last 15 months
US crude oil prices settled at $54.45 per barrel on February 23, 2017—the highest level since June 2015. As of May 19, 2017, crude oil prices were 7.6% below their highs.
Key bullish drivers for crude oil in 2017
- a possible extension of major oil producers’ production cut deal for nine more months
- high Chinese crude oil imports and demand
- India’s high crude oil imports and demand
Crude oil’s lows in the last 15 months
US crude oil settled at $26.21 per barrel on February 11, 2016. Prices hit a 13-year low due to the following factors:
- record US crude oil production in 2015
- record OPEC crude oil production
- record Russian oil production
- record global crude oil and high refined product inventories
As of May 19, 2017, crude oil prices have risen 92% from their 2016 lows. Higher crude oil (ERY) (ERX) (USO) prices have a positive impact on oil producers’ earnings such as PDC Energy (PDCE), Matador Resources (MTDR), SM Energy (SM), and Continental Resources (CLR).
Key bearish drivers for crude oil in 2017
- a rise in US crude oil rigs to April 2015 high
- high US crude oil inventories
- high US crude oil production
In the next part of the series, we’ll look at how Cushing crude oil inventories impact crude oil prices.