US crude oil futures  

July US crude oil (RYE) (VDE) (XLE) futures contracts fell 3.7% and closed at $44.73 per barrel on June 14, 2017. Brent crude oil futures also fell 3.5% and settled at $47 per barrel on the same day. Prices fell due to the following:

  • There was unexpected large build in US gasoline inventories last week.
  • The IEA (International Energy Agency) expects supply to surpass demand in 2018.
  • US crude oil production rose last week.
  • There was a massive fall in US gasoline futures.
  • Gasoline demand fell last week.
  • OPEC’s crude oil production rose in May 2017.

Traders Track the Key Support Level for Crude Oil Futures

US crude oil futures broke below the key support level of $45 per barrel on June 14, 2017. The next key support levels are $43.24 and $41.61 per barrel. Prices could test these levels unless any bullish drivers support oil prices.

Bullish triggers are mentioned below:

  • There’s an expectation of a fall in OPEC and Russia’s crude oil production in June 2017 due to the production cut deal.
  • There could be a supply outage in Nigeria or Libya.
  • A near-record S&P 500 (SPY) (SPX-INDEX) could drive the US energy sector. SPY hit an intraday high of 2,445.7 on June 9, 2017—the highest level ever.
  • The Fed increased US interest rates by 25 basis points on June 14, 2015. Meanwhile, a seven-month low US dollar (UUP) could support oil prices.

Read Will Crude Oil Prices Break the 10-Month Trading Range? for more on bullish and bearish drivers.

Crude oil prices are at the lowest level since November 2016. US crude oil futures have fallen 21.2% year-to-date. Lower crude oil prices have a negative impact on oil producers like Denbury Resources (DNR), Carrizo Oil & Gas (CRZO), and Chevron (CVX).

In the next part, we’ll look at US crude oil inventories.

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