Will US Crude Oil Prices Recover from 10-Month Lows?

US crude oil prices 

US crude oil (XLE) (USO) (UCO) futures contracts for August delivery fell 2.3% and settled at $42.53 per barrel on June 21, 2017. It’s the lowest settlement since August 10, 2016. August Brent crude oil futures fell 2.6% and closed at $44.8 per barrel on the same day.

The energy sector is dragging the S&P 500 (SPY) (SPX-INDEX). The S&P 500 fell 0.06% on June 21, 2017.

Will US Crude Oil Prices Recover from 10-Month Lows?

Crude oil futures performance 

Brent and US crude of futures have fallen 23.8% and 25.3% year-to-date. Crude oil futures have entered into a bear market. Crude oil prices hit a ten-month low on June 21, 2017. Lower oil prices have a negative impact on oil and gas exploration and production companies. Oil producers Bill Barrett (BBG), Whiting Petroleum (WLL), and Carrizo Oil & Gas (CRZO) fell 12.4%, 9.3%, and 8.8%, respectively, on June 21, 2017. 

Major factors that are weighing on crude oil prices are:

Traders are worried that the production cut deal won’t be able to remove surplus crude oil from the market. As a result, US crude oil futures broke below the key support level of $43 per barrel on June 21, 2017. Bearish fundamentals and moving averages suggest that prices could fall more. Prices could even hit $40 per barrel in the short term.

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